Internationalization process’ motivations

Main peculiarities of geoeconomic model IER

№	Signs	Criteria
	Aims	Strategic
	The link of IRC-system in cooperation	Not only trade link, but Investment, manufacturing
	The number of links	Not less than 2-3
	Raw materials component (share)	Low
	The subject of international cooperation	New materials, aerospace, «life science», pharmaceuticals, medical instruments
	The object of interaction	Goods-object, goods-program
	«Rent»	Attend. «Rent» is a type of the enterprise participation in redistribution of «world income»
	Add value	High
	Profit	Enterprise accumulate the main share of profit
	Status of huge national companies	Strategic
	Comprehension of model	«Сountry-system»
	Labor division	Inter-enclave
	Management style	On the base of knowledge
	The type of contract	About scale’ longtime cooperation, collaboration between territorial-manufacturing structures
	Effectiveness	Long-term strategic

Appendix 8

Theory name	The essence
Neoclassical theory	Neoclassical theory fixes attention on conditions of productions and possible profits from monopoly. So, motivation is economies of scale. International activity gives an opportunity for the company to increase sales, production and to decrease unit expenses. It is necessary to explore foreign markets especially for developed countries: its productive capacity exceeds domestic demand. International companies consider the whole world as a source of supply. They extract resources in country with the best price on it. So, the advantage is opportunity to get cheaper resources, capital and labor force
Theory of institutional conception	This theory emphasizes features of contractual and informal interactions between companies
Transaction costs theory	There are significant transaction costs, search costs, contracting costs and coordination costs. Those costs frequently determine reasons for multinational corporations. (Transaction costs within the company are always less than between two different ones)
Theory of evolution	Evolutionary economics started out mainly as a critique to mainstream economics that explains economic phenomena from rational choices of profit-maximising firms and utility-maximising agents. Evolutionary economists argue instead that most decisions of firms and consumers are taken in a habitual manner because their rationality is bounded. Company’s activity is connected with evolution of business, executive and technological environment
Entrepreneurship theory	Ambitions of managers and their aspiration for development can also be the reason for internationalization. Entrepreneur would like to create flexible company which is able to interact effectively with its external environment (local and global). Such company is competitive and vigorous
Product’ life-cycle theory	The theory suggests that production of the product gradually moves away from the country of origin as it becomes adopted and common used there. And a producer has the opportunity to extend its life cycle exploring new markets

Appendix 9

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