POST ENTRY INTERNATIONALIZATION OF SERVICE FIRMS IN THE OVERSEAS HOST MARKET: PACE AND NATURE OF CHANGES IN THE RESOURCE COMMITMENT

Abishek Shukla, Melbourne Business School

Abstract

Post entry resource commitments of firms in the host market are investigated to identify different patterns in the internationalization of capital intensive service firms (CISF) and knowledge intensive service firms (KISF). At a theoretical level, this study addresses the lack of research on the progression of firms after entry and also tests the applicability of the established internationalization models to service firms. A quantitative longitudinal research design is used to analyze the pace of irreversible investments in the host market and the findings suggest that KISF accelerate almost twice as fast in their market expansion as CISF. A difference in the nature of change in the resource commitment is also hypothesized and supported. Through, optimal scaling categorical regression, it is noted that KISF change their resource commitment frequently but with lesser degree (evolutionary) as compared to CISF which tend to have few but more significant changes (revolutionary).