ABSTRACT
The relationship between strategies for growth that the industrial enterprise can adopt – which traditionally refers both to product or industrial diversification, and to geographical diversification, or internationalisation – has been the subject of systematic research by economists and strategic management researchers for more than 30 years. However, diversification and internationalisation have often been considered and analysed separately as two distinct phenomena or alternative routes to growth, in the analytical framework derived from the theory of the growth of the firm that originated from Penrose (1959). The traditional perspective concerned essentially the firm’s expansion into new markets; moving into new product markets at home (diversification), or creating new markets abroad through exports and then foreign direct investment were viewed as means of exploiting the firm’s potential for growth or its competitive advantages. Diversification and internationalisation were viewed as being directly interrelated, in that Penrose (1959) and others suggested that the firm had a strategic choice between these two means of exploiting the firm’s growth potential. In recent years, a new perspective has emerged on internationalisation and diversification as means of extending the growth potential or competence itself of the firm. In this event, corporate internationalisation and diversification may also be directly connected, as mutually interrelated ways of spreading the competence base of the firm, and of acquiring new technological assets, or sources of competitive advantage. This had led to a new focus on the internationalisation and diversification of corporate technology, as a reflection of the development of the underlying capability of firms. In the internationalisation field, new theoretical and empirical models have been devised of the process by which multinational companies access locationally dispersed technological assets, through their own international operations and through alliances with other firms (Cantwell, 1989; Kogut and Chang, 1991; Dunning, 1995; Almeida, 1996; Frost, 1996; Kuemmerle, 1996; Pugel et al., 1996; Cantwell and Barrera, 1998; Cantwell and Piscitello, 2000).
