Measuring the gradualist approach to internationalization

TL;DR

This paper introduces a quantitative performance indicator to measure the gradual internationalization process of firms, tested empirically in the Spanish wine sector, enabling analysis of strategic international expansion.

Contribution

It develops the first objective, measurable index of internationalization gradualness, applicable across sectors and regions, filling a key gap in existing literature.

Findings

The index effectively captures firms' internationalization strategies.

Empirical testing shows the index's reliability in the Spanish wine sector.

The tool can be adapted for other industries and geographic areas.

Abstract

The objective of this paper is to fill a gap in the literature on internationalization, in relation to the absence of objective and measurable performance indicators on the process of how firms sequentially enter external markets. To that end, this research develops a quantitative tool that can be used as a performance indicator of gradualness for firms entering external markets at a sectoral level. The performance indicator is based on firms' export volume, number of years of exporting, geographic areas targeted for export, and when exports were initiated for each area. Additionally, the indicator is tested empirically in the Spanish wine sector. The main contribution of this study is the creation of an international priority index which serves as a valuable and reliable tool because of its potential use in other industry sectors and geographic areas, allowing us to analyze how geographically differentiated internationalization strategies develop.