Internationalization as an evolutionary process

The Johanson and Vahlne model of internationalization has been the main foundation of process research in international business since 1977. This model, also known as the Uppsala model, provides a useful general framework for interpreting firm-level processes increasing (and occasionally decreasing) resources committed to international operations. However, the model does not provide theoretical explanations of non-linear and discontinuous dynamics of the process over time, nor does it offer testable propositions. We focus on the longitudinal dimension of internationalization, specifically path-breaking commitments that increase a firm’s exposure to risk. On this basis, we examine the idea that the IP model represents an evolutionary process. By emphasizing the role of novelty and introducing selection mechanisms, we explain non-linear and discontinuous dynamics of internationalization processes. Path-breaking resource commitments create novelty and deviate from a gradual path of growth as firms take higher risks, and hence face more intensive selection pressures. In consequence, firms are more likely to experience outstanding performance – but are also more likely to experience failure. This variation of outcomes is moderated by the resources a firm can draw upon in its ecosystem and by the volatility of its environment. Based on these ideas, we develop testable propositions to advance the internationalization process model.