Value Creation Logics and Internationalization of Service Firms

While mainstream theories in international business and management are founded either explicitly or implicitly on studies of manufacturing firms, prior attempts to develop theory on the internationalization of service firms are sparse and have yet to establish solid and comprehensive frameworks. The thrust of this study is that value creation logics, a construct originally developed by Stabell and Fjeldstad (1998) can assist us in better understanding why and how service firms internationalize. We extend this construct and propose that the internationalization of service firms must be based on a thorough understanding of the fundamental nature of these firms. We put forward ten propositions concerning the pace of internationalization in service firms and the dominant foreign operation modes. The use of value creation logics can be a useful complement to the conventional approaches to the study of service firms’ internationalization. However, the fact that most firms encompass more than one value creation logic complicates the use of firm databases and industry statistics. The study presents a novel theoretical approach and a set of propositions on service firm internationalization founded on the specific characteristics of the service activities.