THE INTERNATIONAL TRANSFERABILITY OF THE FIRMS ADVANTAGES

The international transfer of advantages by a firm is a necessary condition for successful international operations. Because of the difference between advantages relative to home competitors and advantages relative to foreign competitors, the source of the advantage transferred abroad need not be something unique to the firm. Rather, it can be a factor or characteristic shared by the industry or nation, or it can also be a non-distinctive asset or skill. Non-transferability, in turn, stems from immobility due to geographical specificity and tacit knowledge. Transfer is neither automatic nor easy and often requires investment in complementary assets. Transferability also affects and is affected by the choice of the mode of operation and the choice of target country. Understanding the concept of transferability of advantages is useful in building bridges between strategic management and international business.