ABSTRACT
This chapter investigates the effect of internationalization decision on firm performance of export businesses that are based in a developing country. Explanatory research design was used and data were collected through a survey questionnaire based on convenience sampling technique. A total of 322 questionnaires were administered to the study participants, of which 287 were completed. This suggests a response rate of 89.13%. In order to test the reliability of the instrument (standard questionnaire), Cronbach’s alpha measure was considered; and pilot testing was done to enhance the validity of the instrument. Pearson correlation and multiple linear regression analysis were employed to estimate the statistical relationships between decision factors of internationalization (independent variable) and firm performance (dependent variable). The effects of all predictors (transaction-cost-based induced entry decision; resource-based induced entry decision; and institutional-based induced entry decision) found to be statistically significant. More precisely, the study found out that transaction-cost-based induced entry decisions, institutional-based induced entry decisions, and resource-based induced entry decisions have statistically strong, positive, and significant effect on firm performance. Given the dearth of studies on the subject of internationalization decision from this region of the world, this study will contribute to this domain both theoretically and empirically by extending the subject of the study to lesser charted regions of the world.
