The propensity to continue internationalization: A study of entrepreneurial decision-making in Australian service firms

To investigate a firm's propensity to continue internationalization, the so-called Uppsala internationalization process model is a logical point of departure (Johanson & Vahlne, 1977, 1990). Building upon a behavioral theory of the firm (Cyert & March, 1963) and Penrose's (1959) theory of the growth of the firm, the basic logic of the Uppsala or U-model is quite straightforward: The allocation of resources to foreign activities holds a certain risk yet induces experiential learning, which results in market-specific knowledge. The increasing stock of market-specific knowledge reduces this risk and stimulates additional allocation of resources (Eriksson, Johanson, Majkgård, & Sharma, 1997).