An Empirical Investigation of the Role of Industry Factors in the Internationalization Patterns of Firms

By Birgitte Grøgaard, C. Gioia, Gabriel R. G. Benito. 2005

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Research on companies' internationalization has mainly focused on firm-level and country-level factors in order to explain firms' cross-border activities. With the exception of a limited number of studies emphasizing rivalrous behavior in oligopolistic industries, industry factors have been neglected as potential determinants of companies' internationalization. We argue that differences across industries with regard to concentration, research intensity, tangibility of the products, and the existence of clusters should influence the impetus and opportunities to internationalize. This study examines the role of such factors using panel data covering the internationalization patterns of the 100 largest nonfinancial Norwegian companies over the period 1990 to 2000. We find that even for firms in a small, open, advanced economies where the limited market size in itself motivates firms to internationalize, industry factors still contribute significantly to explaining the internationalization of these companies. Furthermore, the effects of industry factors remain strong when firm-level characteristics are taken into account.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/136e756e7a4861c9721ce24f06eed1c51e4a90d1