Motivation of internationalization and a moderating role of environmental conditions in the hospitality industry

Abstract

As internationalization has been widely implemented throughout the tourism industry, it is important to understand what motivates a firm to internationalize its business. Thus, this study examines the motivation for internationalization based on the neoinstitutional theory. This study employs a hierarchical linear modeling (HLM) to test the proposed hypotheses, using the annual firm-level data of the tourism industry, and finds that tourism firms including casinos, hotels, and restaurants are demotivated to diversify their international expansion into different countries as their competitors increase the scope of countries in which they operate. However, if a firm perceives its competitors as speeding up the process of internationalization, that firm will also increase the pace of internationalization. In addition, this relationship between competitors and focal firms’ internationalization varies according to environmental conditions (i.e., dynamism, complexity, and munificence). The findings of the study contribute to the internationalization and tourism literature.