Early internationalization: A transaction cost economics and structural embeddedness perspective

This paper develops and tests a framework for the determinants of early internationalization by drawing on transaction cost economics supplemented with structural embeddedness reasoning. We theoretically explore how asset specificity, prior international experience of the management team, and international network contacts impact early internationalization of the firm. Furthermore, we elaborate how early internationalization is related to foreign market performance. Our results show that asset specificity is negatively related to early internationalization, whereas prior international experience of the management team and international network contacts have a positive impact on early internationalization. Furthermore, our results suggest that early internationalizers are more successful in respect to foreign market performance than companies that have internationalized in later years.