Causes of the Difficulties in Internationalization

Journal of International Business Studies, Vol. 38, No. 5, pp. 709-725, 2007

22 Pages Posted: 6 Dec 2007

See all articles by Alvaro Cuervo-Cazurra

Alvaro Cuervo-Cazurra

Northeastern University - Department of International Business and Strategy

Mary M. Maloney

Univesity of St. Thomas, Opus College of Business

Shalini Manrakhan

affiliation not provided to SSRN

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 an advantage of resources transferred abroad, creation of a disadvantage by resources transferred abroad, or 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 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.

Keywords: cost of doing business abroad, liability of foreignness, internationalization, multinational enterprises, resource-based theory

JEL Classification: F23

Suggested Citation

Cuervo-Cazurra, Alvaro and Maloney, Mary M. and Manrakhan, Shalini, Causes of the Difficulties in Internationalization. Journal of International Business Studies, Vol. 38, No. 5, pp. 709-725, 2007. Available at SSRN: https://ssrn.com/abstract=1059601

Alvaro Cuervo-Cazurra (Contact Author)

Northeastern University - Department of International Business and Strategy ( email )

D'Amore-McKim School of Business
313 Hayden Hall, 360 Huntington Avenue
Boston, MA 02115
United States
16173736568 (Phone)
16173738628 (Fax)

HOME PAGE: http://cuervo-cazurra.com

Mary M. Maloney

Univesity of St. Thomas, Opus College of Business ( email )

1000 LaSalle Avenue
TMH 443
Minneapolis, MN 55403
United States

Shalini Manrakhan

affiliation not provided to SSRN ( email )

No Address Available

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