The impact of strategic choice on the international-ization of the firm

• Main Authors: CLARK, Timothy, MALLORY, Geoff
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1997
• Subjects: Foreign Direct Investment; Direct Investment; Foreign Market; Institutional Arrangement; Entry Mode; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6330; https://ink.library.smu.edu.sg/context/lkcsb_research/article/7329/viewcontent/978_1_349_25353_1_10.pdf
• Institution: Singapore Management University

Companies either seeking to expand into foreign markets or to alter their existing institutional arrangements have a choice between three forms of foreign market servicing: exporting, foreign licensing and foreign direct investment (FDI)1 (Buckley 1991; Buckley and Casson 1976; Root 1987; Terpstra 1987). The ‘stages theory of internationalisation’ proposes that these options are chosen in a linear sequence in that firms initially export, then establish a sales subsidiary and only when they have built up knowledge and experience do they invest directly.