Challenging the Uppsala Internationalization Model: a Contingent Approach to the Internationalization of Services

Abstract

Some authors have questioned whether the well-known Uppsala internationalization model would be generalizable to services. We take one of the model’s assumptions – that firms will follow a gradually increasing resource commitment path in each country – and challenge whether it would hold up under specific service characteristics or particular combinations of environmental variables and service characteristics. We review the literature in search of more appropriate dimensions for the classification of services that would allow for the test of the Uppsala model’s assumption. Based on purely conceptual reasoning, supported by previous empirical studies, we propose some hypotheses about how service firms would be expected to behave – in terms of their choice of foreign entry mode - under certain circumstances and what the performance implications would be expected to be. These hypotheses are contrary to the Uppsala model’s predictions. This paper is solelyconceptual, so the key constructs (environment and service-specific variables) would still require operationalization before the hypotheses can be empirically tested.

Keywords

• firm internationalization
• international business
• services.