Inward-Outward Internationalization Patterns
in Two Brazilian Industries
Autoria: Angela Maria Cavalcanti da Rocha, Maria Domenica Serpa Blundi, Vanessa Tavares
de Jesus Dias
ABSTRACT
This study investigated outward and inward internationalization patterns in two Brazilian
industries: paper and pulp and footwear. Both industries have been traditionally involved with
international operations for many decades. Data was collected by a mail survey. A total of 45
firms from the footwear industry and 40 from the paper and pulp industry returned the
questionnaire. Chi-square tests were used to test the research hypotheses. Some results
contradicted the empirical findings reported in the literature; contrary to expected, smaller
firms did not show more often combinations of inward and outward activities than larger
firms. However, the industry to which a firm belongs seems to influence to a large extent the
different combinations of inward-outward activities used by firms in the industry. Further
research seems to be necessary to better understand inward-outward connections in the
internationalization process of the firm.
INTRODUCTION
This study looked at outward and inward internationalization activities of Brazilian firms in
two industries: paper and pulp and footwear.
Brazil is an interesting locus of research on the internationalization of the firm because of a
number of unique factors. First, Brazilian firms were late in internationalizing, despite the fact
that Brazilian economy ranks number eleven in the world in terms of GDP. The reasons for
such late entry in the international arena have been discussed in many studies and range from
geographical (the country’s location in South America) to economic (economic policies that
did not stimulate exports or FDI), entrepreneurial (lack of managers’ willingness to accept
risk), psychic (large perceived psychic distance to foreign countries), and cultural (the nature
of family businesses and the perception of cultural distance), besides the traditional
explanation of the attractiveness of a large domestic market. Second, Brazil has been one of
the countries least open to foreign trade in the last decades, due to the adoption of import
substitution policies. These policies aimed initially at protecting the infant industry and permit
rapid industrialization, but with the debt crisis of the 80s import substitution became a
necessity to achieve trade balance. In fact, protectionism was only reduced in the late 80s and
beginning of the 90s when trade tariffs were substantially lowered and non tariff barriers were
in large extent eliminated, permitting the entry of foreign products in the Brazilian market.
One interesting measure of the impact of the opening of Brazilian markets to foreign products
is the extent by which Brazilian companies used foreign inputs in their production processes.
Oliveira Júnior (2000) estimated that the average percentage of imports of intermediary
products for Brazil in 1995 was 5.3%, compared to 8.2% for the U.S., 20.2% for Canada and
21.6% for England. This coefficient was 5.0% for the paper and pulp industry; and 5.3% for
the footwear industry in the year 1995. There is no data available for more recent years, but it
1
can be estimated that these coefficients increased until the end of 1998 due to the overvalued
Brazilian currency. In January 1999, a 50% devaluation of the local currency probably forced
many Brazilian firms to substitute some of their imported raw materials, parts or components
for local products in order to remain competitive.
These two factors – late internationalization and decadeslong severe restrictions to imports –
suggest limited international activities by a large number of firms until the end of the 80s, and
a substantial increase during the 90s. In fact, Brazilian trade (exports plus imports) doubled
from 1990 to 2000, from $ 56 billion to 111 billion. This implies that a large number of firms
have initiated or substantially increased export and import activities during the last decade,
permitting to analyze both inward and outward internationalization processes.
LITERATURE REVIEW
Internationalization Theory and Stages Theory of Internationalization
One of the most dominant theoretical models in the study of a firm’s internationalization
process is the one proposed by Nordic scholars often referred to as the Uppsala
internationalization theory. Based on early studies in the 70s by several Nordic researchers,
which saw the international firm as a learning organization, characterized by limited
knowledge of international markets and bounded rationality (Bjorkman and Forsgren, 2000),
Johanson and Vahlne (1977) proposed a model which described such process as a sequential
set of stages of internationalization, with increased commitment to international operations.
Firms increase their commitment to international operations as they acquire experiential
knowledge in foreign markets by conducting business activities. Knowledge is acquired
through experience; it is seen as a “driving force” in the internationalization process
(Bjorkman and Forsgren, 2000). Firms typically start their operations in a psychically close
market; as experience is acquired, psychic distance to foreign markets is reduced, and the firm
expands its international activities to more distant markets. Psychic distance between the
home and the host country was originally defined as “the sum of factors preventing the flow
of information from and to the market” (Johanson and Vahlne, 1977, p.24), and more recently
as “mapping relations between cultural proximity and foreignness of international markets”
(Stöttinger and Schlegelmilch, 2000, p.169).
Johanson and Wiederscheim-Paul (1975) proposed the existence of four stages in the
internationalization process of the firm: no regular export activities; export via independent
representatives; sales subsidiary; production/manufacturing abroad. The authors believed that
such stages were different “with regard to the degree of involvement of the firm in the
market” (p. 306).
The idea of an evolutionary approach to the internationalization process of the firm was
supported by other authors. Pavord and Bogart (1975), Bilkey and Tesar (1977), Reid (1981),
Czinkota and Johnston (1981) and Czinkota (1985) proposed a series of stages based on the
degree of the firm’s involvement with exporting. Their stage models do not contemplate
international involvement beyond exporting. Cavusgil (1980, 1982, 1984) advanced four
stages of international involvement, the last one including other international activities
besides exporting.
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Empirical research produced mixed results. Welch and Luostarinen (1988) claimed that
research in several countries showed “a reasonable degree of consistency, at least up to the
mid-70s, that the pattern of internationalization for most firms has been marked by a
sequential, stepwise process of development” (p.48). Juul and Waters (1987) confirmed that
the internationalization pattern of Norwegian firms entering the U.K. followed the sequential
model of internationalization and Rao and Naidu (1992) found significant differences among
Wisconsin firms in different stages of the internationalization process. Yet Jarillo and
Martínez (1991) argued that although this approach might have worked in the 70s, it did not
describe the strategic behavior of Spanish firms in the 80s in their international development.
It was also found that the stages model was rather the exception than the rule in explaining the
international behavior of U.K. firms entering the EC (Millington and Bayliss, 1990); and that
it did not adequately explain the international development of software firms (Bell, 1995).
The theory has received a number of criticisms. One criticism was directed towards a
perceived deterministic nature of the theory (Melin, 1992; Andersen, 1993). Reid (1983)
indicated that there was no rationale to justify why companies should go through a systematic
set of stages in their internationalization. Such approach, he claimed, was highly speculative.
Strandskov (1993, p.210) argued that the belief in the existence of “universal regularities
implies a deterministic description of firm evolution over time”. Another criticism referred to
the static nature of the model (Leonidou and Katsikeas, 1996). More recently, some
researchers have advanced that the born-global phenomenon, which describes firms that are
internationalized from their inception, challenges traditional internationalization theories
(Oviatt and McDougall, 1994; Knight and Cavusgil, 1995; Madsen and Servais, 1996).
Research findings on the psychic distance construct also produced contradictory results. A
study by Conway and Swift (2000) found that the higher the levels of psychic distance, more
time and effort were required to establish long lasting business relationships. The psychic
distance construct was challenged by certain studies. O’Grady and Lane’s (1996) study, for
example, challenged the assumption that companies would perform better when entering
psychically closer markets; they would rather more often fail because they tend to
underestimate subtle but relevant differences. Stöttinger and Schlegelmilch (1998, 2000)
challenged the relevance of the psychic distance construct to explain the international
behavior of firms, arguing that the construct had very little explanatory power. However,
Evans et al (2000) claimed that psychic distance is still very relevant but its relationship with
performance is not yet known.
In general, most researchers agree (see, for example, Millington and Bayliss, 1990; Morgan
and Katsikeas, 1997; Bjorkman and Forsgren, 2000) – including Johanson and Vahlne (1990)
– that the Uppsala internationalization theory describes more adequately smaller firms and
early stages of internationalization. As firms become multinationals, other theoretical
frameworks may be more adequate to describe their choice of markets and entry modes, their
level of commitment to foreign operations and the importance of internationalization in their
strategic choices. Yet, the Uppsala internationalization model resists empirical tests when the
object of the study is small and recently internationalized companies. In the specific case of
Brazil, there are research evidences that the model adequately explains the relevance of the
sequential model in the internationalization process of Brazilian firms (e.g. Leite, Figueiredo
and Da Rocha, 1988; Barretto and Da Rocha, 2001).
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Inward-Outward Connections in the Internationalization Process
Welch and Luostarinen (1988) proposed a broader view of internationalization involving both
the inward and outward international activities of a firm. Internationalization was thus defined
as “the process of increasing involvement in international operations” (p.35). This definition
encompasses the two sides of internationalization, inward internationalization being seen as
“a mirror image of the outward process” (Welch and Luostarinen, 1993, p.44).
Connections between inward and outward internationalization processes can be direct or
indirect (Welch and Luostarinen, 1993). Direct relationships occur, for example, in the case of
countertrade. Indirect relationships can result from experiential knowledge in international
markets. For example, the learning process involved in importing technology could later be
useful in licensing a foreign company with the firm’s own technology; or importing activities
could lead to foreign orders. The connection between the two sides of internationalization
might not be obvious since inward and outward activities could occur at different times.
It is proposed in the literature that inward activities should contribute to outward involvement
especially in the early stages of internationalization (Welch and Luostarinen, 1993) and in
smaller firms (Kohonen, Luostarinen and Welch, 1996). The connection between inward and
outward internationalization in smaller firms would happen more probably than in larger
firms because in the first the same manager is usually responsible for both activities thus
permitting the cross-learning process to occur.
Indirect evidence of the interconnection between inward and outward internationalization was
provided by a study of Finnish small and medium-sized exporters of manufactured products
(Korhonen, Luostarinen and Welch, 1996). In this study, it was found that 54% of all
exporting firms started their international activities with inward operations. The work of
Young, Huang and McDermott (1996) provided additional evidence of the link between
inward and outward patterns in the internationalization of Chinese state-owned firms. In the
cases studied, however, outward movements preceded inward activities, because of specific
environmental constraints. Research in the United Kingdom (Crick and Jones, 2000), Finland
(Björkman and Kock, 1997), and Brazil (Barretto and Da Rocha, 2001) also supplied
anecdotal evidence of the linkages between inward and outward activities. Examining ten
Brazilian firms with foreign operations, Barretto and Da Rocha verified that although a direct
connection between inward and outward internationalization could only be established in one
case, in most of the other cases “these two sides of internationalization seemed inextricably
linked...” (2001, p.104).
The relationship between inward-outward internationalization patterns and psychic distance
was also of interest to some researchers. It was reported in a study conducted in Australia
(Fletcher and Bohn, 1998) that psychic distance would have a different impact on the firm’s
internationalization process depending on whether it was outward (indirect export, direct
export, sales branch overseas, license overseas, production overseas), inward (indirect import,
direct import, purchasing office overseas and license in Australia for overseas firms), or
linked (countertrade and strategic alliances). The relationship between psychic distance and
internationalization was least for inward activities, followed by outward activities and linked
activities, in this order.
The study by Jones (1999) provided interesting insights on the relationship between inward
4
and outward patterns of internationalization of small high-technology firms in the United
Kingdom. Jones found that although import activities usually appeared in the beginning of the
internationalization process, its impact on further international involvement was not clear;
there was also a number of firms that started with exporting and later developed import
activities. Also, other outward or inward activities associated to production or R&D did occur
in the beginning of firms’ internationalization processes, but they tended to be accompanied
by international trade activities. Younger small-sized high-technology firms tended however
to show more complex inward/outward links.
In general, the number of studies on inward-outward connections in internationalization has
been rather small, especially when considering the growing body of research on the
internationalization of the firm. One obvious reason for this limitation is the difficulty
involved in establishing causality, because of the unusual and indirect links between these two
activities.
METHODOLOGY
Data Collection
Data used in this study were collected in the year 2000 as part of a larger research project
funded by the Brazilian government. Because data collection had other purposes, this study
suffered the typical limitations derived from the use of secondary data. The two industry lists
used in the study included companies that were involved with international activities and
those that were not.
Original data were collected by means of a questionnaire sent by mail to top managers of
companies belonging to the footwear and the paper and pulp industry. These two industries
were chosen because of their export orientation. A list of 351 footwear manufacturers was
obtained from ACI-NH, the Association of Footwear Manufacturers of the State of Rio
Grande do Sul, where the largest regional cluster of footwear production in Brazil is
established. Companies with less than 20 employees were eliminated from the list as well as
companies that had suspended their activities recently. Initial telephone contact was made
with each company in order to verify names and addresses. Questionnaires were then sent to
192 companies. A letter was sent after three weeks as a reminder. A total of 45 companies
answered the questionnaire, representing a response rate of 23%. Similarly, a list of 195
producers of paper and pulp was obtained from Bracelpa - the Brazilian Association of Pulp
and Paper Producers and questionnaires were sent by mail to all these companies, following
the same procedure. A total of 40 usable questionnaires returned, representing a response rate
of 21%. No significant differences were found between the responses of the first and the last
questionnaires returned.
Measures
Outward-Inward Internationalization. The following variables were used to measure outward
and inward international activities: outward internationalization intensity; export intensity;
FDI intensity; licensing intensity; import intensity; joint-venture intensity; technology transfer
intensity; inward and outward internationalization stages and inward-outward combinations.
Two of these measures were excluded from the subsequent analysis: licensing intensity and
5
FDI intensity. No companies were found in the two industries studied that licensed
technology to foreign countries and only two firms had made foreign direct investment.
Stages in the Internationalization Process. Two measures were used: one for outward
internationalization stages and another for inward internationalization stages. To measure
outward internationalization stages, companies were classified in four groups, according to
the highest level of outward activities performed: (1) no outward activities; (2) indirect
exporting; (3) direct exporting; and (4) ownership of foreign subsidiaries. This classification
is similar to the one adopted by Fletcher and Bohn (1998), with the exception of stage 3 –
ownership of foreign subsidiaries – which included both the use of sales offices abroad and
production facilities abroad (stages 3 and 4, respectively, in Fletcher and Bohn’s taxonomy).
This was done because the original file from which the data was drawn did not separate the
two situations. Finally, as mentioned earlier, no companies were found that were involved in
licensing their technology to foreign companies, thus reducing the number of stages to four.
A similar measure was developed for inward internationalization stages; companies were
classified in five groups, according to the highest level of inward activities performed: (1) no
inward activities; (2) indirect importing; (3) direct importing; (4) acquisition of foreign
technology; (5) joint-ventures in Brazil with foreign companies. Again, although similar to
the operational measures used by Fletcher and Bohn (1998), stages 3 and 4 were different in
this study. In Fletcher and Bohn’s taxonomy, stage 3 was characterized by the operation of a
purchasing office abroad, and stage 4 by the concession of licenses in Australia for overseas
firms. In the present study we considered stage 3 as the acquisition of foreign technology and
stage 4 as the establishment of joint-ventures in Brazil with foreign companies. The rationale
for these changes is three-fold. First, this study was limited to the use of data collected with
other purposes, which did not include the use of purchasing offices outside the country.
Second, since no cases of licensing foreign companies appeared in this study, the use of
Fletcher and Bohn’s stage 4 of inward internationalization (license in Australia for overseas
firms) would not be feasible. Third, the acquisition of foreign technology usually is an
important step in the inward internationalization of firms of developing countries. As showed
by Barretto and Da Rocha (2001), the acquisition of foreign technology is commonly found
among Brazilian companies with subsidiaries abroad. This activity showed looser or tighter
connections with outward internationalization. Finally, the change in order, with the
acquisition of technology (licensee) preceding joint-ventures in Brazil was based on the
judgement of the authors and supported by two international business professors that have
been involved in researching international activities of Brazilian firms. They both agreed that,
at least in the Brazilian case, the acquisition of technology by firms was a much less
demanding international activity than the establishment of a joint-venture in the country with
foreign firms. Thus the changes introduced in the last two stages compared to Fletcher and
Bohn’s (1998) proposed taxonomy seemed more adequate to the Brazilian reality, and, for
that matter, to the reality of other developing countries.
Inward-Outward Combinations. Using the two variables defined before, outward and inward
internationalization, a new variable was created, depending on whether: (1) the firm did not
have ant inward or outward activities; (2) the firm had only inward activities; (3) it had only
outward activities, or (4) it had both inward and outward activities.
Firm Size. Size was measured by total company sales in dollars. Five companies in the
sample refused to give this information. For the test of hypothesis, this variable was divided
6
in two groups: less than US$ 5,000,000 and more than US$ 5,000,000. This value was
adopted to differentiate smaller from larger firms.
Data Analysis
The first step in data analysis consisted of computing descriptive statistics. The second step
was the test of hypotheses using chi-square tests. A significance level of 0.05 was adopted in
order to reject the null hypothesis.
RESULTS AND DISCUSSION
Descriptive statistics for selected variables are presented in Tables 2 and 3. Firms belonging
to the paper and pulp industry were, in the average, substantially larger than those belonging
to the footwear industry (average company net sales was $ 64,998,000 in the paper and pulp
industry, compared to only $9,655,000 in the footwear industry).
In general, the footwear industry showed higher outward and inward internationalization
intensity, with an average of 26.3% of outward internationalization intensity and export
intensity and 4.6% of import intensity, compared with only 9.8% of inward
internationalization intensity in the paper and pulp industry, 9.6% of export intensity and
2.9% of import intensity. The slight difference between export intensity and outward
internationalization intensity in the paper and pulp industry is due to two companies that
established subsidiaries abroad.
The paper and pulp industry scored slightly better in joint-venture intensity (2.0%) than the
footwear industry (1.6%) and both had the same percentage of acquisition of foreign
technology on total company sales, with an average of 0.2% for both industries.
The stages patterns in outward internationalization were also substantially different in the two
industries examined, although the overall means were the same for both industries (1.3). Only
17.8% of footwear manufacturers had no outward activities, compared to 40% of their
counterparts in the paper and pulp industry. Few companies in the paper and pulp industry
used indirect exporting (2.5%) with almost all exporters going directly to their customers
(52.5% of all firms). Footwear manufacturers, on the other side, tended to use agents and
representatives to export their products (35.6%), but also a substantial number used direct
methods to export (46.7%). Only two paper and pulp producers and no footwear
manufacturers appeared in stage 3 (ownership of foreign subsidiaries).
As to inward internationalization stages, the situation was inverse. Firms in the paper and pulp
industry tended to be consistently more involved with inward activities than the footwear
manufacturers. More than double the percentage of firms in the footwear industry, compared
to the paper and pulp industry, had no inward activities (37.8% compared to 15%). Also in
contrast with outward activities, there were less footwear manufacturers involved only with
indirect importing (15.6%) compared to paper and pulp producers (30.0%). As to stage 2
(direct importing), however, firms in the footwear industry exceeded those in the paper and
pulp industry (20.0% and 17.5% respectively). In stage 3 (acquisition of foreign technology),
there was a larger percentage of firms from the paper and pulp industry (32.5%) than from
footwear (24.4%). Finally, 5% of the paper and pulp producers had joint-ventures in Brazil
7
with foreign companies (stage 4) compared to 2.2% among footwear manufacturers.
The connection between inward and outward internationalization is shown in Table 3. Only
9% of the footwear manufacturers and 15% of the firms in the paper and pulp industry had
neither inward nor outward international activities. The largest frequency is of companies that
had both inward and outward activities (53.3% of footwear firms and 60% of paper and pulp
producers).
A correlation analysis was performed in order to investigate the association between different
measures of inward and outward internationalization (Tables 4, 5 and 6). Outward and inward
internationalization show a significant but moderate association, with a higher coefficient for
the paper and pulp industry, compared to the footwear industry. However, outward
internationalization shows low correlation coefficients with two measures of inward
internationalization, the percentage of imports of raw material to total production costs and
the percentage of imports of equipment and machinery on total imports, and it does not show
significant associations with the percentage of expenses with the acquisition of foreign
technology and the percentage of sales by joint-ventures with foreign companies in Brazil on
total company sales. The correlation between inward internationalization and the percentage
of exports on total sales was also moderate, positive and significant.
Test of Hypotheses
Hypothesis 1: The choice of inward-outward combinations is industry-specific.
This hypothesis was tested using crosstabs and chi-square statistics. Two variables were used:
industry type (paper and pulp industry and footwear) and inward-outward international
activities combinations. The results permitted to reject the null hypothesis, with a chi-square
of 14.749, 3 degrees of freedom and a probability of 0.002 of erroneous rejection of the null
hypothesis. We can therefore imply that inward-outward combinations seem to be industryspecific.
Inward-outward combinations
Industry
Paper and Pulp
0 - no inward or outward activities
Footwear
Total
6 (15.0%)
4 ( 8.9%)
10 (11.8%)
1 - only inward activities
10 (25.0%)
4 ( 8.9%)
14 (16.5%)
2 - only outward activities
0 ( 0.0%)
12 (26.7%)
12 (14.1%)
24 (60.0%)
25 (52.9%)
49 (57.6%)
3 - inward and outward activities
Although both industries have been traditionally internationally oriented for many
decades, it is clear that the patterns of inward-outward internationalization differ
substantially from one sector to another. The paper and pulp sector shows a
remarkable absence of companies that are only involved in exporting, and a much
higher percentage of “only inward activities”, compared to the footwear sector. Also,
the paper and pulp industry has more companies that are not engaged in exporting.
Hypothesis 2: Smaller firms show more often a combination of both inward and outward
8
international activities.
This hypothesis was also tested using crosstabs and the chi-square test. Two variables were
used: company size (measured by total sales) and inward-outward international activities
combinations. The results showed a chi-square of 26.937, 6 degrees of freedom and p <
0.001. Yet the direction of the relationship is contrary to what was hypothesized in the
literature. Smaller firms do not appear to be more involved with both inward and outward
activities than larger firms. Quite the contrary, smaller firms are more involved with “only
inward activities” or “only outward activities” than larger firms.
Inward-outward combinations
Company size (sales in US$ thousands)
5,000
(n=33)
5,000
(n=47)
Total
(n=80)
0 - no inward or outward activities
6 (18,2%)
3 ( 6,4%)
9 (11,3%)
1 - only inward activities
8 (24,2%)
5 (10,6%)
13 (16,3%)
2 - only outward activities
10 (30,3%)
1 ( 2,1%)
11 (13,8%)
3 - inward and outward activities
9 (27,3%)
38 (80,9%)
47 (58,8%)
CONCLUSIONS
This research explored the relationship between different inward and outward activities in the
internationalization process of the firm. The study was limited by the fact that its data was
drawn from an existing datafile associated to another research project. Yet the results obtained
do seem to offer a contribution to the understanding of inward-outward internationalization
patterns, opening opportunities for future research.
Results point to substantial differences in inward-outward internationalization patterns
depending on the industry to which the firm belongs. It is possible that these patterns are in
fact industry -specific. For example, the local availability of raw materials in one industry,
compared to another, should influence the amount of imports of raw materials by each
industry. Also, when an industry has attained a higher degree of technological development,
or when it is based on a traditional technology already known, it might not show a high level
of technology transfer intensity, compared to another industry. These observations suggest
that the understanding of internationalization patterns may require more cross-industry
studies.
A second relevant aspect of our research results relates to the impact of size on inwardoutward combinations. This study did find a relationship between these two variables, but the
direction of the relationship was opposite to the one previously hypothesized. In-depth studies
may be useful to improve our understanding of the issue.
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12
Table 1
Operational Measures for Outward-Inward Internationalization
Variables
Operational Measures
outward internationalization
intensity
% of company sales coming from three forms of outward
internationalization: exporting, licensing*, and international sales by
foreign subsidiaries
export intensity
% of company sales coming from exporting
licensing intensity*
% of company sales coming from licensing foreign companies
FDI intensity**
% of company sales coming from international sales by foreign
subsidiaries
outward internationalization stage
Companies were classified in five groups, according to the highest level of
outward activities performed:
0 = no outward activities
1 = indirect exporting
2 = direct exporting
3 = licensing
4 = ownership of foreign subsidiaries
import1 intensity
% of imports of raw materials, parts, and components on total production
costs
import2 intensity
% of imports of equipment and machinery on total imports of equipment
and machinery
technology transfer intensity
% of expenses with the acquisition of foreign technology on total company
sales
joint-ventures intensity
% of sales by joint-ventures in Brazil with foreign companies on total
company sales
inward internationalization stage
Companies were classified in five groups, according to the highest level of
inward activities performed:
0 = no inward activities
1 = indirect importing
2 = direct importing
3 = acquisition of foreign technology
4 = joint-ventures in Brazil with foreign companies
inward-outward combinations
0 = no inward or outward activities
1 = only inward activities
2 = only outward activities
3 = both inward and outward activities
firm size
total company sales in dollars
smaller =  US$ 5,000,000
larger = > US$ 5,000,00
13
Table 2
Mean Values of Selected Variables
Footwear Industry
(n=45)
Paper and Pulp
Industry (n=40)
Total
Outward Internationalization
outward internationalization intensity
export intensity
outward internationalization stages
26.3%
26.3%
1.3
9.8%
9.6%
1.3
18.5%
18.5%
1.3
Inward Internationalization
import intensity
technology acquisition intensity
joint-ventures intensity
inward internationalization stages
4.6%
0.2%
1.6%
1.4
2.9%
0.2%
2.0%
1.8
3.8%
0.2%
1.7%
1.6
Firm Size
sales in US$1.000
9,655
64,998
35,698
Variables
Table 3
Frequencies of Selected Variables
Variables
Footwear Industry
Paper and Pulp
Industry
Total
17.8%
35.6%
46.7%
0.0%
0.0%
40.0%
2.5%
52.5%
0.0%
5.0%
28.2%
20.0%
49.4%
0.0%
2.4%
37.8%
15.6%
20.0%
24.4%
2.2%
15.0%
30.0%
17.5%
32.5%
5.0%
27.1%
22.4%
18.8%
28.2%
3.5%
8.9%
37.8%
53.3%
15.0%
25.0%
60.0%
11.8%
31.8%
56.5%
Outward Internationalization Stages
stage 1 - no outward activities
stage 2 - indirect exporting
stage 3 - direct exporting
stage 4 - licensing
stage 5 - ownership of foreign subsidiaries
Inward Internationalization Stages
stage 1 - no inward activities
stage 2 - indirect importing
stage 3 - direct importing
stage 4 - acquisition of foreign technology
stage 5 - joint-ventures in Brazil with foreign
companies
Inward-Outward Combinations
no inward, no outward activities
only outward or only inward activities
both inward and outward activities
14
Table 4
Correlations between Inward and Outward Stages of Internationalization
Variables
Footwear
Paper and Pulp
Stage of Outward Internationalization
with
Stage of Inward Internationalization
0.318
(0.017)
0.543
(0.000)
Total
0.419
(0.000)
Table 5
Correlations between Level of Outward Internationalization and Inward Variables
Inward Internationalization Variables
Level of Outward Internationalization
Footwear
Paper and
Total
Pulp
0.271
(0.036)
0.397
(0.006)
0.295
(0.003)
% of imports of equipment and machinery on total imports of 0.281
equipment and machinery
(0.031)
0.346
(0.014)
0.318
(0.001)
% of expenses with the acquisition of foreign technology on -0.113
total company sales
(0.230)
0.080
(0.312)
0.010
(0.465)
% of sales by joint-ventures in Brazil with foreign companies 0.143
on total company sales
(0.174)
0.145
(0.186)
0.142
(0.098)
% of imports of raw materials. parts. and components on total
production costs
Table 6
Correlations between Level of Inward Internationalization and one Outward Variable
Outward Internationalization Variable
Degree of Inward Internationalization
Footwear
% of company sales coming from exports
0.391
(0.004)
15
Paper and
Pulp
0.459
(0.001)
Total
0.306
(0.002)