Internationalising in small, incremental or larger steps?

Harry G. Barkema*, Rian Drogendijk

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

251 Citations (Scopus)

Abstract

We argue that companies may enter foreign environments either incrementally, as suggested by long-established theory, or by taking larger steps that may result in lower initial performance but, through learning and experience, lead to increased performance in future expansions. This idea is corroborated by the experience of Dutch companies entering into Central and Eastern Europe. We also find that expansion steps may be too large, thereby limiting the exploration of foreign environments. Our study suggests that sequential internationalisation strategies do still matter, and that companies have to balance exploitation and exploration in internationalisation.

Original languageEnglish
Pages (from-to)1132-1148
Number of pages17
JournalJournal of International Business Studies
Volume38
Issue number7
DOIs
Publication statusPublished - Dec-2007
Externally publishedYes

Keywords

  • internationalisation
  • learning
  • cultural differences
  • exploitation and exploration
  • TRANSACTION-COST-ANALYSIS
  • ENTRY-MODE CHOICE
  • JOINT VENTURES
  • FOREIGN ENTRY
  • MULTINATIONAL-ENTERPRISES
  • TRANSITION ECONOMIES
  • PRODUCT DEVELOPMENT
  • NATIONAL CULTURE
  • EASTERN-EUROPE
  • UNITED-STATES

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