Internationalization of Internet Companies - Does it fit the I18N model?

Although the theory of the gradual internationalization of firms has been widely studied and supported by researchers, very little is known about the internationalization of electronic commerce firms. To address the issue more effectively, Kim (2003) has conducted a study in the context of Internet firms that are engaged in only online business.

Classic Theories

According to classic theories, e.g. Uppsala research and the Innovation research the internationalization of the comapnies happen gradually as their perceived risk of foreign market decreases. 

The gradual internationalization theory postulates that firms take the entry mode that requires less resource commitment (e.g. exporting) in the beginning of foreign market entry and then shift to another entry mode that demands more resource commitment (e.g. wholly owned subsidiary) as the perceived risks in the foreign market decrease (Uppsala).

Moreover, the gradual internationalization theory implicitly believes that firms enter markets that are psychically close to home market first and then gradually expand into other markets that have a higher psychic distance from the home market (Uppsala). Differences in language, culture, business environment, political and social system, and other factors that are heterogeneous in two markets may contribute to the psychic distance. It has been believed to be one of the most important factors that determine the gradual internationalization process of firms.