ABSTRACT
Even if each firm has its own reasons why internationalisation may be advantageous to its future, different economists and business scholars have found models to explain the internationalisation process and the existence of TNCs, in the hope of finding some common features. As SMEs involved in trans-border business activities can be considered as small TNCs, a critical presentation of the different models may be interesting. There are different theoretical approaches to a firm’s internationalisa-
tion and only the most important models or concepts are described in this chapter. First, authors such as Hymer and Vernon have focused on the structures of market oligopolies and imperfect competition. Second, Coase, Williamson, Buckley, Casson and Rugman considered different types of organisation related to relative costs. Applied to international firms, this signifies the choice between foreign-market serving by integration or not. Third, Dunning’s eclectic paradigm explained the existence of a transnational enterprise by considering simultaneously ownership, location and internalisation advantages. The fourth approach, the Uppsala stage model, was less an explanation of international production. It rather explained the process of internationalisation. The fifth approach is derived from business and strategic management literature.
