Firms' Financial Benefits and Costs of Internationalization Today

Management@TUHH Research Paper Series

26 Pages Posted: 14 Oct 2013

See all articles by Nicole Richter

Nicole Richter

Technical University Hamburg-Harburg (TUHH)

Fabian Wulhorst

Technical University Hamburg-Harburg (TUHH)

Date Written: October 14, 2013

Abstract

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

Suggested Citation

Richter, Nicole and Wulhorst, Fabian, Firms' Financial Benefits and Costs of Internationalization Today (October 14, 2013). Management@TUHH Research Paper Series, Available at SSRN: https://ssrn.com/abstract=2340071 or http://dx.doi.org/10.2139/ssrn.2340071

Nicole Richter (Contact Author)

Technical University Hamburg-Harburg (TUHH) ( email )

Schwarzenbergstrasse 95
Hamburg, DE Hamburg 21073
Germany

Fabian Wulhorst

Technical University Hamburg-Harburg (TUHH) ( email )

Schwarzenbergstrasse 95
Hamburg, DE Hamburg 21073
Germany

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