Inward-Outward Connections in Internationalization

This article examines the impact of inward and outward aspects of internationalization. The effect of the inward process on outward moves has been the subject of limited research, although some evidence from studies of licensing and franchising in Australia suggests inward steps can sometimes play an important preparatory role in the outward process. Governments have for some time used inward international flows to force a reverse process—through strict countertrade policies, for example, or, as in the Australian case through its ‘partnership scheme.’ An important public policy question is how to regard international steps in any outward promotional scheme. For example, among individual firms there is a need to use inward moves in a more productive way to promote outward internationalization, perhaps by selecting foreign suppliers in part on the basis of their ability to contribute to an outward strategy.