AI and International Business Strategies

The theoretical foundations of international business strategy rest on a set of questions that have occupied scholars since the seminal contributions of Hymer (1960) and Vernon (1966): why do firms expand across national borders, how do they choose among alternative modes of international engagement, and what determines their capacity to sustain competitive advantage in foreign markets? The frameworks developed in response to these questions—the eclectic paradigm (Dunning, 1988, 2001), the Uppsala model of internationalization (Johanson & Vahlne, 1977; Johanson & Vahlne, 2009), and the resource-based perspective on multinational enterprise (Kogut & Zander, 1993; Tallman, 1991)—have proven remarkably durable analytical frameworks, generating cumulative research programs that span decades and disciplines. The diffusion of AI into the strategic repertoire of internationally operating firms does not render these frameworks obsolete, but it requires their substantive extension in ways that this chapter seeks to develop. The central argument is that AI alters the logic of internationalization across three analytically distinct dimensions: the configuration of ownership advantages that motivate foreign expansion, the governance of knowledge transfer across organizational and national boundaries, and the balance between global integration and local responsiveness that defines the fundamental strategic tension of multinational enterprise. Each of these dimensions is examined in turn, drawing on the established theoretical traditions of international business scholarship and extending them to encompass the distinctive properties of AI-enabled competitive advantage.