Contrasting Internationalization Paths of Product- and Service-oriented Software Firms

The internationalization of software firms has been widely researched topic over the last two decades. However, the most of the studies have treated software firms as a homogeneous group, ignoring the fact that software firms actually differ greatly in terms of having either a product or a service orientation. Based on earlier literature, we hypothesized that software product firms would show a tendency to internationalize earlier and at a smaller size than software service firms, and that product firms would show a greater tendency to target countries that are both geographically and culturally distant. In fact, we found no support for most of our hypotheses, with relatively strong and statistically significant results emerging in the opposite direction. We offer several explanations for these counterintuitive findings.