Driving forces of internationalization: differences between sectors

Abstract

Globalization and the progress in information and communication technologies, as well as international services trade agreements, have improved the position of service industries in the world economy. Therefore, an increasing number of service firms are engaging in foreign markets. The literature on internationalization, however, does not pay much attention to this sector, tending to focus more on the manufacturing sector and multinational enterprises (MNEs). Regarding this subject, scholars highlight four features that distinguish services from manufactured goods: intangibility, inseparability, perishability and heterogeneity. Researchers argue that these characteristics influences the motivations of particular service industries to engage in foreign market operations and this also inevitably makes their internationalization motivations and determinants different from that of the manufacturing sector. Bearing in mind this gap in the literature, the main objective of this study is to empirically investigate the driving forces behind internationalization of Portuguese firms, focusing on differences between sectors. Specifically, to examine the factors that determine firm internationalization strategy and the differences between service and manufacturing firms. To achieve this goal, we used Quantitative Analysis Methodologies. Data collected from 199 valid responses were treated using IBM SPSS Statistics 26.0 software. Given the nature of the data (categorical variables measured on an ordinal scale), the statistical methods used for the data analysis were Descriptive Analysis (frequency analysis and graphical representations) and Inferential Analysis (Kruskall-Wallis nonparametric test with multiple comparisons).