Scandinavian Working Papers in Business Administration

Working Papers,
Copenhagen Business School, Department of International Economics and Management

No 4-1999: The Internationalization Process of Danish Firms - gradual learning or discrete rational choices?

Torben Pedersen
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Torben Pedersen: Department of International Economics and Management, Copenhagen Business School, Postal: Department of International Economics and Management, Copenhagen Business School, Howitzvej 60, 2nd floor , DK-2200 Copenhagen N, Denmark

Abstract: The Uppsala Internationalization model has greatly influenced Nordic research on the internationalization process of firms. In this article, the Uppsala model is tested on Danish empirical material. The Danish firms largely follow a sequential development as regards the geographical dimension, where, typically, they set up in culturally close markets first and later set up in the more distant markets. On the other hand, the firms seem to follow to a less extent a pattern of sequential expansion of market commitment on the single foreign markets, just as a surprising number of establishments are set up without previous activity on the market. Crucial differences cannot be found between the establishment pattern abroad of large and small firms. The Uppsala model in itself cannot explain the internationalization pattern of the Danish firms, which is why the article advocates that the internationalization process should be understood as an interaction between internal conditions in the firm ("learning" processes), external competitive conditions and more basic economic factors (assessment of market potential).

Keywords: Internationalization; Denmark; Sweden; Uppsala model; market entry; expansion

28 pages, May 29, 1999

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