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In this chapter, we embrace the recent phenomenon of early internationalizing firms with the goal of understanding these firms in light of decades of research on multinational firms, which has long stressed liabilities of foreignness. It is often implicitly assumed that the only way to reduce liabilities of foreignness is by doing business in foreign markets and learning about the local business environment. However, in this chapter, we focus on several distinctive antecedent firm characteristics that have been shown to facilitate early international expansion by firms, but which are not commonly considered in the international business literature. We perform a systematic review of the literature on early internationalizing firms (following David & Han, 2004), based on the seminal work of Oviatt and McDougall (1994) to guide our analysis of early internationalizing firms and to identify important ways in which these firms differ from multinational firms. We argue that long-standing arguments about the impact of liabilities of foreignness on firm foreign expansion apply to newly internationalizing firms, but that these liabilities are reduced by the experiences and knowledge of the founders and top managers in these firms acquired prior to the inception of these firms.

If we look to the uniqueness of IB/IM scholarship and ask where it stands separate from standard and traditional management and business research we really have only two differentiating, but exceedingly important, factors that justify discussing IB/IM as a separate research paradigm (See, e.g., Devinney, Pedersen, & Tihanyi, 2010).

Yair Aharoni is a Professor Emeritus at the Faculty of Management, Tel-Aviv University. He received his DBA from the Harvard University Graduate School of Business Administration. His doctoral dissertation – The Foreign Investment Decision Process – was published in a book version and was translated to Spanish and Japanese. He is a Fellow of the International Academy of Management and the Academy of International Business. During his long and distinguished academic career, Aharoni was the Daniel and Grace Ross Professor of International Business and later the Issachar Haimovic Professor of Business Policy – both at Tel Aviv University. He was the Thomas Henry Caroll Ford Foundation Visiting Professor of Business Administration, Harvard Graduate School of Business Administration (1978–1979). He was also the J. Paul Stitch Visiting Professor of International Business at Duke University (1987–1995) and the director of CIBER (Center of International Business Education and Research) (1992–1995). He published several dozens books and monographs in Hebrew and in English, more than 100 papers and chapters in books and more than 150 cases. For his academic achievements he was awarded both Landau Prize (2007) and Israel Prize in management science (2010).