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The provision of business services is becoming increasingly international in scope. However, the internationalisation of firms within the sector has yet to be fully explored. Drawing on evidence from advertising, accountancy, management consultancy, and computer services firms active in the UK during the 1980s and early 1990s, this paper demonstrates that a variety of mechanisms are used to facilitate the cross border provision of business services. It is argued that exports, both independent and intra-firm, play a significant role in the internationalisation process. Hence some firms progress in stages from the exportation of services to the establishment of overseas production sites in an evolutionary manner.
The business services sector is undoubtedly becoming increasingly international in scope. However, the internationalisation of firms within the sector has yet to be fully explored. Firms become international when they extend their activities into overseas markets. The more involved they are in such markets the greater the level of internationalisation.1 The process of internationalisation usually occurs in an evolutionary manner with firms increasing their overseas involvement gradually, passing through various stages in the course of entering and establishing a production facility in a foreign market. It is the purpose of this paper to examine the process of internationalisation among business service firms. Drawing on evidence from UK business service firms active in the 1980s and early 1990s, this paper demonstrates that business service firms pass through a number of stages in the process of internationalisation, and that contrary to the widely held view that the export of services is limited, exports both independent and intra-firm play a significant role in the course of overseas expansion.
Business services are used ultimately by business firms and other productive enterprises. They are extremely diverse, including activities concerned with both handling tangible products, such as, machinery repair or catering, and providing intangible expertise, like accountancy or consultancy services. The focus of this research is on information intensive business services, specifically advertising, accountancy, computer services and management consultancy services. These sub-sectors display high levels of internationalisation, and potential for further overseas expansion. Furthermore, they embody a number of common characteristics which act as constraints on the methods of internationalisation utilised, these include: the need for personal contact between producer and client; the importance...