ABSTRACT
In the globalized world economy and with simultaneous tectonic technological changes, the internationalization of firms has become the key to sustained growth. It is not only important in order to compensate for a small national market that cannot offer efficiency through economies of scale and scope but also in order to tap the knowledge and technology created abroad. International trade is, with the growing globalization and oligopolization of market structures, no longer an efficient way for firms to earn profits on the basis of their advantages that are increasingly becoming intangible. The market is failing to adequately reward the owners of such knowledge. Therefore, firms are 'forced' to internalize their operations, to invest abroad so as to be remunerated for their intangible knowledge. With the advancement of transition, the firms of Central and Eastern European countries (CEECs) will have to develop their own specific knowledge/technologies in order to survive and fend off growing foreign competition.
