Factors Influencing The Internationalization Of Firms Case Of Addis Ababa City Exporters

The study aims at identifying factors influencing internationalization and their relation withrnimproved international business performance of export firms found in Addis Ababa city.rnExplanatory research design was used and data collected through primary source usingrnquestionnaire. 287 respondents were participated in the survey based on simple randomrnsampling method of sample selection by using mathematical formula. In order to test thernreliability of the instrument, the Cronbanch alpha test was used. Pearson correlation andrnmultiple linear regression analysis were employed to estimate the causal relationships betweenrndependent and independent variables. Finally, the responses of the respondents were analyzedrnusing descriptive Statistics, correlation, and regression through computer loaded SPSS software.rnThe empirical results showed that host countries high market potential, reputation of therncompany’s in the industry and increased value and number of employees were motivating factorsrnfor deciding internationalization of Ethiopian export firms. The effects of all predictors werernstatistically strong positive and significant effect on improved international businessrnperformance. The overall finding of this study suggests that firm size, competitive advantagesrnand market characteristics had statistically strong positive and significant effect on improvedrninternational business performance. On this basis, it is recommended that export firms shallrnincrease the value and number of employees and shall concentrate on host countries that havernhigh market potential while deciding presence on international business activity. Moreover,rnexport firms shall increase reputation of their companies in the industry; possession of uniquernproprietary technology shall be increased and should focus on host countries that haverncomplementary and receptive organizational structures, processes and administrativernconveniences while making foreign entry decisions.rnKey words: Internationalization, Firm Size, Competitive Advantage, Market characteristics

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