Internationalization is the expansion of a firm through participation in international processes, especially outside domestic borders (Kutschker and Baurle, 1997). Firm internationalization is based on solid models like the eclectic paradigm, the Uppsala model, the network theory of internationalization, the knowledge theory, and the “born global” theory.
The Dunning eclectic paradigm (2010) principal hypothesis is that the level and structure of firm’s foreign value-adding activities will depend on the following conditions: ownership (O) advantages, location (L) advantages, and internalization (I) advantages. Hence, the Dunning eclectic paradigm is also recognized by the name of OLI paradigm. This model is known for studying Foreign Direct Investment (FDI).
On its part, the internalization theory explores doing business across different entry modes, as developed by Buckley and Casson (1976), Rugman (1981), and Hennart (1982), explaining why the MNE will exert proprietary control over an intangible, knowledge-based, firm specific advantage (FSA). In this regard, firms choose the optimal mode for entering a market by studying their costs and risks, based on market features, and analyzing their own resources (Hood & Young, 1979).
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For Knight (2005) born globals might herald a more diverse international business system in which any firm can succeed internationally. Andersson (2016) explains the origin of born globals because of lower trade barriers, increased competition and rapid technological development of more and more small and medium-sized firms (SMEs). His research area focuses on the interrelatedness between entrepreneurship and international business. Reviews of international entrepreneurship research have been also directed by Keupp and Gassman (2009), indicating the academic contradictions in the international entrepreneurship
The Dunning eclectic paradigm (2010) principal hypothesis is that the level and structure of firm’s foreign value-adding activities will depend on the following conditions: ownership (O) advantages, location (L) advantages, and internalization (I) advantages. Hence, the Dunning eclectic paradigm is also recognized by the name of OLI paradigm. This model is known for studying Foreign Direct Investment (FDI).
On its part, the internalization theory explores doing business across different entry modes, as developed by Buckley and Casson (1976), Rugman (1981), and Hennart (1982), explaining why the MNE will exert proprietary control over an intangible, knowledge-based, firm specific advantage (FSA). In this regard, firms choose the optimal mode for entering a market by studying their costs and risks, based on market features, and analyzing their own resources (Hood & Young, 1979).
There …show more content…
For Knight (2005) born globals might herald a more diverse international business system in which any firm can succeed internationally. Andersson (2016) explains the origin of born globals because of lower trade barriers, increased competition and rapid technological development of more and more small and medium-sized firms (SMEs). His research area focuses on the interrelatedness between entrepreneurship and international business. Reviews of international entrepreneurship research have been also directed by Keupp and Gassman (2009), indicating the academic contradictions in the international entrepreneurship