ABSTRACT
This chapter discusses the typical process followed in firms' internationalization, as well as the main entry modes at their disposal. It also explains important theories of the core drivers and sequence of internationalization, as well as choice among entry modes. The internationalization of the firm had been traditionally seen as a gradual process—once firms have consolidated in their domestic market, they start to build activities abroad, first by exporting and later by investing abroad. Born global firms challenge this conventional view. The International Monetary Fund and the United Nations Conference on Trade and Development (UNCTAD) puts the threshold to be considered a direct investment (as opposed to a portfolio investment) at 10 percent of the capital of a local company. Over all, decisions related to market selection (where) and choice of entry modes (how) are central to the internationalization of firms.
