Firms' Financial Benefits and Costs of Internationalization Today
Management@TUHH Research Paper Series
26 Pages Posted: 14 Oct 2013
Date Written: October 14, 2013
In this paper, we collect and contrast theoretical arguments on the benefits and costs of internationalization and develop a comprehensive and structured overview of different theoretical concepts. We also critically evaluate these concepts in terms of their practical importance: this refers to both the relevance for multinational firms (MNEs) today, and to the specificity or applicability to what we term benefits and costs from a financial accounting perspective. We find a slight overweight of positive financial effects of internationalization, which – however – is less clear as might practically have been assumed. Without directly incorporating contextual or management aspects, we are unable to draw theoretical inference on a strong positive or negative development of financial positions. This paper therefore provides a conceptualization of different cost and revenue developments – nothing more, but also nothing less.
Keywords: Benefits of internationalization, costs of internationalization, liabilities of foreignness, liabilities of multinationality, costs of doing business abroad
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