De-internationalization: A Thematic Review and the Directions Forward.

Date01 Junio 2021
AuthorTang, Ryan W.

1 Introduction

For more than a decade, de-internationalization has been theoretically recognized as an important part of the dynamics of firm internationalization (Welch and Welch 2009). The phenomenon has recently become salient, with global foreign direct investment showing a consistent decline since 2016 (i.e., from $1.97 trillion in 2016 to $1.54 trillion in 2019; UNCTAD) and cross-border trade flow slowing (i.e., a drop of around 10-30% in global goods trade in 2020; The Economist 2020). De-internationalization and the halting of new initiatives in internationalization are two main strategies that firms adopt in response to the qualitative slide of foreign markets. Compared to a halt in internationalization, however, de-internationalization has practical, far-reaching implications for firms that either engage in direct investment in foreign countries or export overseas if these firms rely on these international activities to create value. Despite the theoretical importance and practical significance of de-internationalization, the international business (IB) field has yet to fully understand this phenomenon. This study aims to synthesize previous findings and seek paths for future research on de-internationalization.

De-internationalization comprises multiple aspects such as foreign divestment and export reduction; withdrawal of a foreign operation and global exit; termination and backshoring (Turcan 2006). These aspects suggest similar conceptual underpinnings (i.e., a reduced degree of internationalization) but also disparities in motivations, actions, and outcomes. Such differences reflect the varieties of de-internationalization (e.g., various degrees, scopes, and approaches) and, consequently, dynamic drivers, diverse outcomes, and numerous contingencies. This multiplicity has triggered growing attention from scholars and produced a rapid increase of de-internationalization studies. However, individual studies may provide only a snapshot of the complexity of de-internationalization by investigating only certain aspects and not the entire range of considerations. Also, myriads of de-internationalization issues have been researched through different lenses, such as management, marketing, and economics, the result of which atomistically illuminates various themes and subthemes. Thus, it is important to synthesize the literature by means of an integrative survey to provide a holistic understanding of conclusions and identify consensuses, controversies, and caveats.

In synthesizing the theoretical arguments and empirical findings in 218 articles published between 1979 and 2019, we conducted a framework-based thematic review. This approach allows researchers to orchestrate conceptual themes in an array of literature sources and identify gaps in the literature on a focal decision and its antecedents, consequences, and moderators (Paul and Criado 2020). Therefore, it has been widely used in previous literature reviews (e.g., CuervoCazurra et al. 2019; Wei et al. 2018), and it enabled us to make two primary contributions.

First, we mapped the piecemeal knowledge contained in the de-internationalization literature into four themes: concepts, antecedents, consequences, and moderators. While prior research has tried to summarize findings of a specific aspect of de-internationalization, for example, divestment (Arte and Larimo 2019; Coudounaris et al. 2020; Nemeth and Nippa 2013; Schmid and Morschett 2019), and outcomes of empirical tests (Trapczynski 2016), our mapping provides synthesized knowledge at a broader and more collective level than in the work of predecessors, presenting a panoramic picture of theorization and findings. This synthesis enables the scholarly community to distinguish boundaries and understand associations between conceptual elements in order to investigate a specific topic by building new knowledge in line with prior research.

Second, we identified paths for future research by searching for gaps in the deinternationalization literature. Prior research investigated de-internationalization from multiple perspectives by recognizing it as, for example, a type of cross-border activity (Turcan 2003, 2006) and an important element of internationalization (Benito and Welch 1997; Welch and Welch 2009). Our study sheds new light on this research and pushes this frontier forward by encapsulating four major themes within a dynamic framework: the multidimensional conceptualization of de-internationalization, the motives for and barriers to de-internationalization, and the long-term impacts of de-internationalization on various stakeholders as well as the contingencies of these impacts. These themes suggest possible avenues for future research on de-internationalization.

The rest of this article proceeds as follows. In the next section, we introduce our conceptual postulate and elaborate our literature survey. We then synthesize deinternationalization literature in a conceptual map and illuminate its essential elements and their connections. Based on the mapping, we identify gaps in the extant literature, which lead to a thematic framework showing paths for future research. Finally, we conclude this article by discussing limitations and implications.

2 Literature Background and a Survey of Prior Research

Conventional IB theories focus mainly on a firm's incremental steps toward internationalization, for example, internalization of foreign operations (Buckley and Casson 1976) and a gradual increase in international engagement (Johanson and Vahlne 1977). However, de-internationalization represents a dwindling step intertwined with internationalization (Welch and Welch 2009). Prior research has conceptualized de-internationalization in various ways, such as the end of international operations (e.g., Bane and Neubauer 1981; Meschi and Metais 2015), entrepreneurial activities (Turcan 2006), turning points of internationalization (Turcan 2013), divestment of foreign subsidiaries (e.g., Blake and Moschieri 2017; Soule et al. 2014), and changes of business models (Sort and Turcan 2019).

Because of the diversity of de-internationalization concepts, prior research has noted a variety of relevant activities. When it is conceptualized as an end, de-internationalization may be observed as a firm's exit from a foreign market (Chung et al. 2008), withdrawal from a host country (Fisch and Zschoche 2012), the survival of a foreign subsidiary (Peng and Beamish 2014), the longevity of a foreign operation (Makino and Beamish 1998), or the closure or termination of a foreign operation (Mata and Portugal 2015). As a turning point of internationalization or a change in business models, de-internationalization may be related to a firm's backshoring (Dachs et al. 2019), reshoring (Albertoni et al. 2017), de-exporting (Turcan 2006), and de-franchising or de-licensing (Sort and Turcan 2019). From the lens of foreign divestment, firms de-internationalize via divestment (Calof and Beamish 1995), selloff (Blake and Moschieri 2017), or dissolution of foreign operations (Mohr et al. 2016).

Given the multiplicity of de-internationalization, we orchestrated the diverse concepts and aspects of de-internationalization research into a conceptual map of publications. We did so by following the processes recommended by Duriau et al. (2007) and the best practices adopted in previous literature reviews (e.g., Sedziniauskiene et al. 2019). Figure 1 provides a step-by-step guide for our research procedure to identify 218 de-internationalization articles. Table 1 presents a selection of the articles on de-internationalization. A full list of the included articles appears in Appendix 1. We note that these articles are distributed unevenly among years, outlets, research methods, home and host countries, industry sectors, and company types, as shown in Appendix 2.

3 Conceptual Mapping: The Literature Synthesis

Based on the systematic and in-depth review of selected articles, we orchestrated the extant literature around four themes, based on the relationships between key elements that these articles analyzed. Figure 2 presents these relationships in a conceptual map, showing the de-internationalization concept and its antecedents, consequences, and moderators.

3.1 Concept

De-internationalization research was initiated by an investigation into foreign divestment (Boddewyn 1979) and has evolved into a broad concept covering a range of relevant activities (Benito and Welch 1997; Turcan 2006). In past decades, researchers have included a wide range of approaches and concepts in the literature, which contributed to the dynamics of de-internationalization research but also made it more complicated than it initially appeared to be.

3.1.1 De-internationalization and Its Strategies

Given the discipline-specific variation of the same phenomena, the notion of deinternationalization is not as clear as it should be. For example, in economics, it is sometimes described as quitting international trade (Atkeson and Burstein 2010); in marketing studies, it primarily refers to exiting from foreign markets (Hadjikhani and Johanson 1996); in operational management, it refers to backshoring or reshoring (Gray et al. 2017); in entrepreneurship, it refers to a turning point (Turcan 2013) or a change in business models (Sort and Turcan 2019); and, in IB literature, it interchangeably refers to, for example, the divestment of foreign affiliates (Boddewyn 1979), the closure of manufacturing plants overseas (Ghertman 1988), the termination of international joint ventures (Hennart and Zeng 2002), the survival of foreign subsidiaries (e.g., Mitchell et al. 1994), or the longevity of foreign ventures (e.g., Barkema et al. 1996).

In addition, the extant literature has shown that de-internationalization is path dependent. For example, a firm may divest its foreign subsidiaries in which it previously invested (e.g., Belderbos and Zou 2009) but exit a foreign...

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