Internationalization Revisited: The 'Big Step' Hypotheses

Torben Pedersen, J. Myles Shaver

    Research output: Working paperResearch

    1 Downloads (Pure)

    Abstract

    We refine the prominent of the process by which firms expand internationally - internationalization theory. By argumenting the behavioral theory of the firm (which is the basis of internationalization theory) with theories of foreign direct investment, we argue that international expansion is not a gradual incremental process as argued by internationalization theory. Rather, we hypothesize that international expansion is a discontinuous process characterized by an initial "big step." We expect that the differences of operating in one`s home country versus abroad are the major difficulties faced by foreign firms, and subsequently the differences between foreign countries are only marginal. As a result, we hypothesize that the internationalization process will be characterized by the following observations: (a) firms take a long period of time to make their first international investment; (b) firms take shorter but constant periods of time for subsequent investments; (c) no relationship between time to expansion and the cultural distance of the target country will exist. We examine the international expansion activities of 176 Danish firms over 150 years and find support for these arguments.
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherDepartment of International Economics and Management, Copenhagen Business School
    Number of pages31
    Publication statusPublished - 2000
    SeriesWorking Paper / Department of International Economics and Management, Copenhagen Business School
    Number5-2000

    Cite this

    Pedersen, T., & Shaver, J. M. (2000). Internationalization Revisited: The 'Big Step' Hypotheses. Frederiksberg: Department of International Economics and Management, Copenhagen Business School. Working Paper / Department of International Economics and Management, Copenhagen Business School, No. 5-2000
    Pedersen, Torben ; Shaver, J. Myles. / Internationalization Revisited : The 'Big Step' Hypotheses. Frederiksberg : Department of International Economics and Management, Copenhagen Business School, 2000. (Working Paper / Department of International Economics and Management, Copenhagen Business School; No. 5-2000).
    @techreport{fbca7760c02311db9769000ea68e967b,
    title = "Internationalization Revisited: The 'Big Step' Hypotheses",
    abstract = "We refine the prominent of the process by which firms expand internationally - internationalization theory. By argumenting the behavioral theory of the firm (which is the basis of internationalization theory) with theories of foreign direct investment, we argue that international expansion is not a gradual incremental process as argued by internationalization theory. Rather, we hypothesize that international expansion is a discontinuous process characterized by an initial {"}big step.{"} We expect that the differences of operating in one`s home country versus abroad are the major difficulties faced by foreign firms, and subsequently the differences between foreign countries are only marginal. As a result, we hypothesize that the internationalization process will be characterized by the following observations: (a) firms take a long period of time to make their first international investment; (b) firms take shorter but constant periods of time for subsequent investments; (c) no relationship between time to expansion and the cultural distance of the target country will exist. We examine the international expansion activities of 176 Danish firms over 150 years and find support for these arguments.",
    keywords = "Virksomhedens internationalisering",
    author = "Torben Pedersen and Shaver, {J. Myles}",
    year = "2000",
    language = "English",
    series = "Working Paper / Department of International Economics and Management, Copenhagen Business School",
    publisher = "Department of International Economics and Management, Copenhagen Business School",
    number = "5-2000",
    type = "WorkingPaper",
    institution = "Department of International Economics and Management, Copenhagen Business School",

    }

    Pedersen, T & Shaver, JM 2000 'Internationalization Revisited: The 'Big Step' Hypotheses' Department of International Economics and Management, Copenhagen Business School, Frederiksberg.

    Internationalization Revisited : The 'Big Step' Hypotheses. / Pedersen, Torben; Shaver, J. Myles.

    Frederiksberg : Department of International Economics and Management, Copenhagen Business School, 2000.

    Research output: Working paperResearch

    TY - UNPB

    T1 - Internationalization Revisited

    T2 - The 'Big Step' Hypotheses

    AU - Pedersen, Torben

    AU - Shaver, J. Myles

    PY - 2000

    Y1 - 2000

    N2 - We refine the prominent of the process by which firms expand internationally - internationalization theory. By argumenting the behavioral theory of the firm (which is the basis of internationalization theory) with theories of foreign direct investment, we argue that international expansion is not a gradual incremental process as argued by internationalization theory. Rather, we hypothesize that international expansion is a discontinuous process characterized by an initial "big step." We expect that the differences of operating in one`s home country versus abroad are the major difficulties faced by foreign firms, and subsequently the differences between foreign countries are only marginal. As a result, we hypothesize that the internationalization process will be characterized by the following observations: (a) firms take a long period of time to make their first international investment; (b) firms take shorter but constant periods of time for subsequent investments; (c) no relationship between time to expansion and the cultural distance of the target country will exist. We examine the international expansion activities of 176 Danish firms over 150 years and find support for these arguments.

    AB - We refine the prominent of the process by which firms expand internationally - internationalization theory. By argumenting the behavioral theory of the firm (which is the basis of internationalization theory) with theories of foreign direct investment, we argue that international expansion is not a gradual incremental process as argued by internationalization theory. Rather, we hypothesize that international expansion is a discontinuous process characterized by an initial "big step." We expect that the differences of operating in one`s home country versus abroad are the major difficulties faced by foreign firms, and subsequently the differences between foreign countries are only marginal. As a result, we hypothesize that the internationalization process will be characterized by the following observations: (a) firms take a long period of time to make their first international investment; (b) firms take shorter but constant periods of time for subsequent investments; (c) no relationship between time to expansion and the cultural distance of the target country will exist. We examine the international expansion activities of 176 Danish firms over 150 years and find support for these arguments.

    KW - Virksomhedens internationalisering

    M3 - Working paper

    T3 - Working Paper / Department of International Economics and Management, Copenhagen Business School

    BT - Internationalization Revisited

    PB - Department of International Economics and Management, Copenhagen Business School

    CY - Frederiksberg

    ER -

    Pedersen T, Shaver JM. Internationalization Revisited: The 'Big Step' Hypotheses. Frederiksberg: Department of International Economics and Management, Copenhagen Business School. 2000.