Internationalization of Firms in Developing Countries - An integrated Conceptual Framework

The last three decades have witnessed a substantial amount of research into the internationalisation process of firms. The focus of most of these studies have, however, been on the downstream aspects of internationalisation with the assumption that all firms initiate their internationalisation process with export and proceed in a path-dependent manner towards the location of production activities abroad. The present chapter challenges this perspective, arguing that internationalisation of firms may be initiated through either or both upstream and downstream activities. It therefore proposes an integrated conceptual model for internationalisation, encompassing both upstream and downstream activities. Building on this understanding, the chapter suggests that firms in general and developing country-based firms in particular, may adopt one or a combination of four routes of internationalisation: upstream only, downstream only, sequential upstream-downstream, and or concurrent upstream-downstream routes. The implications of these perspectives for policy, strategy and research are discussed