The impact of cultural distance on the Norwegian start-up’s decision to internationalize

Abstract

The increasing globalization, homogenization of markets and growth of international and cultural awareness throughout the past decades is commonly seen to accelerate the internationalization of SMEs. The recent years have witnessed a phenomenal growth in the number of small and medium-sized firms (SMEs) entering foreign markets. This phenomenon has captured the attention of scholars and resulted in an increasing amount of studies on international expansion of small sized firms. Most researches have traditionally focused on how the firms internationalize once this decision is made rather than on the factors that drive the decision to internationalize in the first place. This thesis offers exploratory insights into the start-ups process of making decision to internationalize. Particularly this study seeks to address the question of cultural distance impact on the start-ups decision to internationalize. Based on a sample of eight Norwegian start-ups, a qualitative case study research has been conducted. The findings reveal that perceived cultural distance, which is very subjective in its nature, does make an impact on start-ups decision to internationalize. This is a hidden factor on the stage of making decision to internationalize but will be obvious in the following stage of making strategic decisions related to international expansion. This study contributes to the growing knowledge base about start-up’s international expansion.