Explanatory power of internationalization theories : a case study of Norwegian SMEs targeting developing countries

Abstract

Theories on the internationalization process of firms have been developed by researchers over many decades. These theories have been affected by the present time, their origins, and the given firms in the research. Physical distance is no longer an issue, and internationalization is these days almost a necessity for a specialized SME when its domestic market is threaten by global competition. Today, more firms internationalize and they do it more rapidly than before. Influenced by authorities or their networks, going abroad has become easier. Therefore, the research problem we express is: “The problem is that, given globalization, the theories available to explain the internationalization process by SMEs are hardly applicable today.‖ Access to energy is a driver of development and plays a central role in both fighting poverty and addressing climate change. The United Nations (UN) and several other organizations are offering significant funds for carry out renewable energy (RE) projects in the developing world. These developing countries represent a huge emerging market that is an attractive target for foreign international firms. But it is also a risky market given instable regimes and an absence of regulations and institutions that constitute barriers for foreign investors. Both firms in this study offer PV technology, and their main market is in Europe. Both firms also have experience targeting developing countries. The result of the study shows that the explanatory power of the theories presented here need modification to be valid in times when the circumstances of firms change constantly and significantly.