When is it Better to Have No Role Models? Evidence from the Internationalization of Companies in the German Software Industry

The internationalization of a company is a complex endeavor. However, because of the special characteristics of the software industry, the internationalization of a software company can be particularly critical to its success. This study is among the first to employ institutional theory to analyze a software company’s degree of internationalization. An analysis based on the survey of 306 German software companies shows that both managers’ perception of the domestic market as a “comfort zone” and debt investors’ pressures have a significant impact on the companies’ internationalization behavior. Besides, when they perceive the domestic market as unattractive, software companies that have other German IT companies as a role model internationalize to a lesser degree than companies without German role models. The study’s findings therefore point to successful strategies for policy-makers and managers alike that aspire to foster the internationalization of software companies.