What Are The Factors That Influence Internationalization

Literature review
Internationalization

In the introduction the concept of internationalization was already introduced. However, to understand internationalization better it is also vital to understand the factors that drive internationalization. Recent research has gone “back to the basics” to try and identify additional motives for companies to internationalize (Rammer & Schmiele, 2008). Because of this nowadays we have a more encompassing view of which factors influence the internationalization process.

A widely mentioned factor that influences the internationalization process is the attitude that managers and executives of a company have towards growth and internationalization. Cavusgil and Nevin (1981) concluded that the expectations and aspirations that managers and executives have towards the firm’s growth can be seen as a starting point for firms to export products and to

Orser et al (2008) even identified growth as the main motive for a firm’s internationalization process. They found that the financial structure influenced the internationalization choice to acquire more capital through a broader spectrum of investment. Luostarinen (1979) already showed that financial internationalization motives can be seen in the internationalization process itself through the choices that a firm makes. These financial motives can for example be seen in the choice of outsourcing production to reduce the costs of a firm or reducing costs by exporting.
After we identified the factors that influence internationalization, the focus now shifts to the different kinds of internationalization processes a firm can choose from. One of the first models to explain the internationalization of the firm was The Electronic model of internationalization, which was developed by Dunning (1977). This model was used to explain foreign direct investment and foreign activities of