Going international? Important factors executives should consider!

Abstract

Purpose

The purpose of the paper is to explore the likely main driving forces behind the internationalization process for publicly traded restaurant firms in the USA, and to offer restaurant executives insights for successful expansions into the international arena.

Design/methodology/approach

The paper uses data from publicly‐traded restaurant firms in the USA that have made the decision to expand internationally. The data spans both sides of the decision, i.e. before the international expansion and right after.

Findings

This paper finds that firms that are growing rapidly, have lots of debt, or are in an economy that is growing rapidly prefer to expand in the domestic market. In contrast, firms that have achieved a high level of market penetration tend to expand in the international markets.

Practical implications

The paper recommends the following key factors to be considered before a decision is made to expand internationally: size, leverage, penetration, and annual market excess return.

Originality/value

This paper attempts to provide, for the first time, systematic financial evidence about the factors that executives should consider during their strategic decision making process of firm internationalization.

Citation

Hua, N. and Upneja, A. (2007), "Going international? Important factors executives should consider!", International Journal of Contemporary Hospitality Management, Vol. 19 No. 7, pp. 537-545. https://doi.org/10.1108/09596110710818284