Methods to Measure Enterprise Internationalization
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Publication date: 2006-03-31
GNPJE 2006;206(3):41-57
The degree of internationalization of enterprises is determined by the intensity and scope of their business activity on foreign markets. Enterprises are subject to increasing internationalization in the context of globalization, which also applies to Polish enterprises. However, the actual level of internationalization is unknown because it has not been the subject of research so far. The article consequently sets out to: - review scientific achievements in measuring enterprise internationalization to date - verify and assess the usefulness of the most popular indicator known as the transnationality index (TNI) - propose modifications in this index - promote interest among researchers and businesspeople in methods to measure the internationalization of Polish enterprises. In the empirical part of the article, on the basis of a list of the world’s 100 largest corporations compiled by UNCTAD in 2004, the author developed six analytical indicators and one composite indicator to measure the internationalization of enterprises. A comparison of the results of the research shows that there is no relationship between the analytical measures and the composite indicator. This calls for a search for better methods to measure enterprise internationalization, hence the proposal to modify the method for calculating the ITA, ITS and ITZ analytical indices, which make up the TNI index. The principal difference is based on changing the content of these indices so that the internationalization of assets, sales and employment in a given corporation is measured in relation to the corresponding values for all transnational corporations. The analytical indices of internationalization calculated in this way as the basis for the TNI index should better reflect the actual level of internationalization.
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