How to shape internationalization : footprint configurations of knowledge-intensive service firms

Abstract

In today’s increasingly complex and globalized business landscape, knowledge-intensive service (KIS) firms face both opportunities and challenges—particularly in determining the optimal geographic scope of their internationalization strategies. Existing literature offers two contrasting narratives: one underscores the difficulties posed by KIS-specific characteristics such as knowledge intangibility and institutional embeddedness; the other highlights the advantages of expanding global reach. To reconcile these views, we adopt a configurational approach to examine how international footprints can be structured to enhance firm evaluation. Drawing on a categorization lens, we analyze how two key dimensions of international footprint—extent and dispersion—interact with firm-level contingencies to influence evaluation outcomes. Based on a configurational analysis of 50 European law firms, we identify multiple equifinal configurations of internationalization associated with superior evaluation. These configurations range from minimal to extensive international presence, and from regional concentration to broad geographic dispersion. Notably, our findings emphasize international dispersion as a critical factor in achieving favorable evaluations. This study contributes to a more nuanced understanding of KIS internationalization and informs ongoing debates about the optimal scale and spatial reach of global expansion strategies for KIS firms.

HIGHLIGHTS • Today’s increasingly knowledge intensive and globalizing business environment creates both opportunities and challenges to knowledge-intensive service (KIS) firms. An important set of opportunities and challenges concern the “where?” of international locations. • Drawing on configurational and categorical thinking, we explore how different combinations of international extent and dispersion affect KIS firm evaluation. • Our theoretical puzzle broaches two contrasting narratives in prior literature: one emphasizing constraints due to KIS-specific traits like knowledge intangibility and institutional embeddedness; and the other highlighting benefits of KIS firms expanding global reach. And our study bridges these perspectives. • We analyze European law firms using fuzzy-set Qualitative Comparative Analysis. Findings reveal that firm evaluation is not dependent on the extent of international presence alone. Rather, firms that operate across diverse markets—even with limited host countries—can derive knowledge creation benefits and higher evaluation. • Our findings include international footprint patterns both with and without high international extent, and reveal that evaluation is high when international footprint is dispersed to diverse markets, even when internationalization extent is limited. Especially influential is institutional dispersion—engaging with a range of institutional contexts. This research contributes to a more nuanced understanding of how KIS firms can strategically structure their international footprints to maximize evaluation.