Internationalization of Traditional and E- Business in Finance: A Comparative Study

Abstract

This research explores the internationalization processes of E-Business Companies (EBCs) compared to traditional firms in the finance sector, focusing on the role of Internet technology in shaping their strategies. The study integrates insights from the Uppsala Model of Internationalization, Born Global, Dunning’s Eclectic Paradigm, and the Resource-Based View to examine key factors influencing internationalization, including market entry barriers, firm size and age, the internet, managerial structure, knowledge, and cultural differences. The case study involves two firms: Company X, a FinTech EBC, and Deutsche Bank AG, a traditional financial services provider. Findings reveal that both firms were driven to internationalize by their managerial approach and culture, but the use of internet technology emerges as a significant driver for EBCs. EBCs leverage the internet to internationalize rapidly, while traditional firms adopt a gradual and iterative approach. Traditional firms establish physical presence in foreign markets, whereas EBCs predominantly rely on online operations. Both face similar barriers related to government regulation and the nature of the finance sector, but EBCs’ internationalization is less capital-intensive. The study contributes to the existing literature by emphasizing the unique strategies of EBCs utilizing Internet technology. However, questions arise regarding the potential influence of the finance sector on observed behaviors, and further research is suggested. The FinTech era represents untapped potential for EBCs, warranting additional research with a broader scope and quantitative methods for increased accuracy.