Networks and the internationalization of firms: what we believe and what we might have missed

This chapter seeks to provide an improved understanding of networks as an influential factor in the internationalization of firms. While the important role of networks in the business development of firms is accepted as common wisdom, the author cautions against the tendency to interpret networks as 'a natural given' to firms and as universally beneficial to their business development. Through a study on the role of personal networks in the foreign development of smaller firms in the Chinese context, a gap between the commonly presumed and the actual effects of networks on internationalization is revealed and the limitations of personal networks in supporting the foreign business development of firms are illustrated. The chapter highlights the need to move from a one-size-fits-all analysis of networks to one that accounts for specific contextual conditions. Accordingly, a behavioural approach that puts emphasis on the active influence of a firm on its networking behaviour, and regards the effects of networks as the firm's behavioural outcomes, is proposed. This approach contributes to enhancing the explanation and prediction of variations of network effects on firms, and providing concrete practical implications regarding a firm's deliberate networking efforts in achieving internationalization.