Analyzing Foreign Market Entry Strategies: Extending the Internalization Approach

Empirical studies of FDI have become much more ambitious in scope over the last 30 years. In the 1960s, the main focus of the Hymer-Kindleberger theory (Hymer, 1976; Kindleberger, 1969) and the product cycle theory (Vernon 1966) was exporting versus FDI. In the 1970s the internalisation approach identified licensing, franchising and subcontracting as other strategic options. The resurgence of mergers and acquisitions in the 1980s — often as a...