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Causes of the difficulties in internationalization

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Author Info

  • Alvaro Cuervo-Cazurra

    (Moore School of Business, University of South Carolina, Columbia, SC, USA)

  • Mary M Maloney

    (Department of Management, Opus College of Business, University of St Thomas, Minneapolis, MN, USA)

  • Shalini Manrakhan

    (Faculty of Engineering, University of Mauritius, Reduit, Mauritius)

Abstract

We study the causes of the difficulties faced by firms when they internationalize in search of new markets. We build on the resource-based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage: loss of advantage provided by resources transferred abroad; creation of a disadvantage by resources transferred abroad; and lack of complementary resources required to operate abroad. In each set, we further distinguish difficulties that are specific to a firm from those that are common to a set of firms. We argue that only a few of the resulting types of difficulties of internationalization are exclusive to the cross-border expansion, and propose solutions that address the root cause of each type. Journal of International Business Studies (2007) 38, 709–725. doi:10.1057/palgrave.jibs.8400295

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

Volume (Year): 38 (2007)
Issue (Month): 5 (September)
Pages: 709-725

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Handle: RePEc:pal:jintbs:v:38:y:2007:i:5:p:709-725

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Cited by:
  1. Sethi, Deepak & Judge, William, 2009. "Reappraising liabilities of foreignness within an integrated perspective of the costs and benefits of doing business abroad," International Business Review, Elsevier, vol. 18(4), pages 404-416, August.
  2. Demirbag, Mehmet & Tatoglu, Ekrem & Glaister, Keith W., 2009. "Equity-based entry modes of emerging country multinationals: Lessons from Turkey," Journal of World Business, Elsevier, vol. 44(4), pages 445-462, October.
  3. Schmid, Stefan & Dauth, Tobias, 2014. "Does internationalization make a difference? Stock market reaction to announcements of international top executive appointments," Journal of World Business, Elsevier, vol. 49(1), pages 63-77.
  4. Ricardo Jorge Fernandes Coutinho & Raquel Meneses Moutinho, 2012. "Generational Succession as a Trigger for Family Business Internationalization," Economics and Management Research Projects: An International Journal, Open Access International Journals, vol. 2(1), pages 1-17, February.
  5. Yildiz, Harun Emre & Fey, Carl Felix, 2012. "The liability of foreignness reconsidered: New insights from the alternative research context of transforming economies," International Business Review, Elsevier, vol. 21(2), pages 269-280.
  6. Lu, Jiangyong & Liu, Xiaohui & Filatotchev, Igor & Wright, Mike, 2014. "The impact of domestic diversification and top management teams on the international diversification of Chinese firms," International Business Review, Elsevier, vol. 23(2), pages 455-467.
  7. Hessels, Jolanda & Parker, Simon C., 2013. "Constraints, internationalization and growth: A cross-country analysis of European SMEs," Journal of World Business, Elsevier, vol. 48(1), pages 137-148.
  8. Romeo V. Turcan, 2013. "International New Venture Legitimation: An Exploratory Study," Administrative Sciences, MDPI, Open Access Journal, vol. 3(4), pages 237-265, November.
  9. Dai, Ou & Liu, Xiaohui, 2009. "Returnee entrepreneurs and firm performance in Chinese high-technology industries," International Business Review, Elsevier, vol. 18(4), pages 373-386, August.
  10. Alvaro, Cuervo-Cazurra, 2011. "Selecting the country in which to start internationalization: The non-sequential internationalization model," Journal of World Business, Elsevier, vol. 46(4), pages 426-437, October.
  11. Eberhard, Manuel & Craig, Justin, 2013. "The evolving role of organisational and personal networks in international market venturing," Journal of World Business, Elsevier, vol. 48(3), pages 385-397.
  12. Lo, Fang-Yi & Mahoney, Joseph T. & Tan, Danchi, 2010. "The Relationship between Location-Bound Advantages and International Strategy: An Empirical Investigation," Working Papers 10-0103, University of Illinois at Urbana-Champaign, College of Business.
  13. Rodolphe Desbordes & Julia Darby & Ian Wooton, 2011. "Institutional Quality and FDI to the South: An Analytical Approach," Working Papers 11-31, University of Strathclyde Business School, Department of Economics.
  14. Chung, Hsi-Mei, 2014. "The role of family management and ownership on semi-globalization pattern of globalization: The case of family business groups," International Business Review, Elsevier, vol. 23(1), pages 260-271.
  15. Jisun Yu & Sung Kim, 2013. "Understanding liability of foreignness in an Asian business context: A study of the Korean asset management industry," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1191-1217, December.
  16. repec:emp:wpaper:ec8-127-i is not listed on IDEAS
  17. Denk, Nikola & Kaufmann, Lutz & Roesch, Jan-Frederik, 2012. "Liabilities of Foreignness Revisited: A Review of Contemporary Studies and Recommendations for Future Research," Journal of International Management, Elsevier, vol. 18(4), pages 322-334.
  18. Nadia AYARI, 2010. "Geographic Distance And R&D Activities Of Subsidiaries Located In Spain," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 32, pages 203-224.
  19. Cuervo-Cazurra, Alvaro, 2008. "The multinationalization of developing country MNEs: The case of multilatinas," Journal of International Management, Elsevier, vol. 14(2), pages 138-154, June.
  20. Czinkota, Michael R. & Grossman, David A. & Javalgi, Rajshekhar (Raj) G. & Nugent, Nicholas, 2009. "Foreign market entry mode of service firms: The case of U.S. MBA programs," Journal of World Business, Elsevier, vol. 44(3), pages 274-286, July.
  21. Lorentz, Harri & Kittipanya-ngam, Pichawadee & Singh Srai, Jagjit, 2013. "Emerging market characteristics and supply network adjustments in internationalising food supply chains," International Journal of Production Economics, Elsevier, vol. 145(1), pages 220-232.
  22. Van Assche, Ari & Schwartz, Galina A., 2013. "Contracting institutions and ownership structure in international joint ventures," Journal of Development Economics, Elsevier, vol. 103(C), pages 124-132.
  23. Ari Van Assche & Galina A. Schwartz, 2013. "Contracting Institutions and Ownership Structure in International Joint Ventures," CIRANO Working Papers 2013s-04, CIRANO.
  24. Boehe, Dirk Michael, 2011. "Exploiting the liability of foreignness: Why do service firms exploit foreign affiliate networks at home?," Journal of International Management, Elsevier, vol. 17(1), pages 15-29, March.

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