Why Do Firms Internationalize? An Empirical Analysis of Western Balkans Firms
Why Do Firms Internationalize? An Empirical Analysis of Western Balkans Firms

Author(s): Nertila Busho
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Internationalization; Innovation; Western Balkans
Summary/Abstract: There is an increasing interest in and intention of firms to internationalize their business operations. Internationalization has become a critical strategy for businesses to achieve competitive advantage and to have better performance. However, the decision to internationalize business operations is driven by different factors that vary across countries and sectors. This research aims to empirically analyse the factors that drive businesses’ decisions to go internationally. To do so, the analysis draws on the Barometer Business Opinion in six countries of the Western Balkans. Considering the data from 1,200 business leaders, the ordinal logistic regression was employed to test the hypothesis. The results confirm that Western Balkan businesses internationalize their operations to have access to new markets. In addition, factors such as access to natural resources, technological innovation and availability of land or real estate, are important drivers to go internationally. On the other hand, lower production costs, including labour force cost, better integration of company’s value chain, business-friendly legal and regulatory environment and tax rates, are not significant factors for firm to go internationally. This article has important policy and managerial implications.

• Details
• Contents