An empirical examination of factors influencing the internationalization of service firms

Abstract

The internationalization of service firms is expanding dramatically, fueled by recent technological innovations and reductions of trade barriers. Drawing upon Dunning’s eclectic theory, firm‐ and location‐specific factors which have been found to be antecedents of internationalization of manufacturing firms are extended to determine their applicability to the internationalization of service firms. The hypotheses are empirically examined through a survey of 228 business‐to‐business service firms. Findings indicate that the firm‐specific factor of firm size and the location‐specific factor of market characteristics influence management attitudes toward operating internationally, which in turn influence the degree of internationalization of service firms. Practical implications, drawn from the results, are offered for managers of service firms who are facing the task of internationalizing.

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