Internationalization of Service Firms and Its Challenges: A Systematic Literature Review

• Post by: gbercc
• April 3, 2024
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ABSTRACT

The internationalization of service firms (ISF) remains an area that needs more study. This systematic literature review encompasses a comprehensive analysis of published articles during the last decade in peer-reviewed journals addressing service firms’ internationalization. Those articles shed light on the motivations driving service firms to expand internationally. It successfully identifies the key factors influencing the internationalization process and the selection of entry modes. Despite the implementation of effective market penetration strategies, service firms must navigate various entry barriers while expanding in the global market, sometimes different from those faced by manufacturing firms. Main challenges emanate from cultural, administrative, geographic, and economic (CAGE) differences. Successful adaptation to the host country is critical to avoid market failures. The review demonstrates that the company’s pre- and post-internationalization “network” is key to long-term success. Cultivating and sustaining these networks is essential for ensuring the longevity of foreign operations. Furthermore, the review identifies the sectors actively pursuing internationalization and explores the relationship between the ISFs and performance. It concludes by presenting an internationalization model and offers valuable directions for future research.

 

Keywords: Foreign Market; Foreign Direct Investment (FDI); Entry barriers; Internationalization network; Internationalization; Services Firm,