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Causes of the difficulties in internationalization

Author

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  • 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

Suggested Citation

  • Alvaro Cuervo-Cazurra & Mary M Maloney & Shalini Manrakhan, 2007. "Causes of the difficulties in internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(5), pages 709-725, September.
  • Handle: RePEc:pal:jintbs:v:38:y:2007:i:5:p:709-725
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