Factors Influencing the Internationalization of Firms: Case of Addis Ababa City Exporters
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Date
2022-02
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A.A.U
Abstract
The study aims at identifying factors influencing internationalization and their relation with
improved international business performance of export firms found in Addis Ababa city.
Explanatory research design was used and data collected through primary source using
questionnaire. 287 respondents were participated in the survey based on simple random
sampling method of sample selection by using mathematical formula. In order to test the
reliability of the instrument, the Cronbanch alpha test was used. Pearson correlation and
multiple linear regression analysis were employed to estimate the causal relationships between
dependent and independent variables. Finally, the responses of the respondents were analyzed
using descriptive Statistics, correlation, and regression through computer loaded SPSS software.
The empirical results showed that host countries high market potential, reputation of the
company’s in the industry and increased value and number of employees were motivating factors
for deciding internationalization of Ethiopian export firms. The effects of all predictors were
statistically strong positive and significant effect on improved international business
performance. The overall finding of this study suggests that firm size, competitive advantages
and market characteristics had statistically strong positive and significant effect on improved
international business performance. On this basis, it is recommended that export firms shall
increase the value and number of employees and shall concentrate on host countries that have
high market potential while deciding presence on international business activity. Moreover,
export firms shall increase reputation of their companies in the industry; possession of unique
proprietary technology shall be increased and should focus on host countries that have
complementary and receptive organizational structures, processes and administrative
conveniences while making foreign entry decisions.
Key words: Internationalization, Firm Size, Competitive Advantage, Market characteristics
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Keywords
Competitive Advantage, Market Characteristics