Scandinavian Working Papers in Economics
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Department of Business Studies, Uppsala University Occasional Papers, Department of Business Studies, Uppsala University

No 2005/1:
Using an optimal matching procedure to analyze foreign expansion processes

Rian Drogendijk

Abstract: With the increasing interest in complex and dynamic processes in the field of IB, the call for systematic analyses of rich datasets is often heard. In this paper I use an an Optimal Matching (OM) procedure (cf. Abbott, 1990; Abbott and Tsay, 2000; Sabherwal and Robey, 1993) to analyze the foreign expansion processes of firms. I argue that OM offers a fruitful approach for the analysis of qualitative and longitudinal data on internationalization processes. It is used to identify typical ‘sequences of events’, in the current paper: sequences of expansion steps by internationalizing companies.

I collected data on the expansion processes of thirteen firms entering the emerging markets in Central and Eastern Europe through field interviews and analysis of archival sources. Analyzing the resulting thirteen expansion processes with OM results in three distinct ‘typical expansion processes’, which can be meaningfully interpreted in correspondence with existing literature on growth strategies. With these findings, this paper goes beyond testing existing models on the internationalization of the firm, such as the Uppsala model (Johanson and Vahlne, 1977), and answers to the call for investigations on the differentiated expansion strategies of modern MNCs (Johanson and Vahlne, 1990; Autio, Sapienza and Almeida, 2000; Buckley and Ghauri, 2004).

Keywords: Optimal Matching; Entry Strategy; Internationalization Process; (follow links to similar papers)

23 pages, October 24, 2005

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