The Role of Technological Capabilities in the Internationalization of Croatian Companies

Abstract

Economic globalization and the increased flow of goods, services, and capital do not only imply new possibilities from the environment, but also new strategic challenges for companies. If a company wants to survive and remain active on the market, it is necessary to expand business activities outside the borders of the mother country i.e. to begin the process of internationalization. There are many modes of internationalization, from those referred to as trans-border (or trans-regional) business operations, those are usually exporting activities, to sophisticated forms that include the activity of founding and taking over foreign companies, technology transfer and other skills and strategic alliances where companies pursue common interests on the global market. If business internationalization is a form of measure of strategic success in relatively unfavorable conditions, then it is relevant to put forward the proposition that business internationalization of the companies in Croatia is the result of developed technological capabilities. Since capabilities are generally seen as prerequisites for expanding business operations, it is not surprising that technological capabilities are considered dominant determinants of the level of internationalization of a company's business activities. The paper addresses interrelationships among technological capabilities measured through investments in technology, investments in research and development, the frequency of introduction of new products and technological solutions and business internationalization defined in its narrow sense as exporting activities and trans-border sales made by Croatian companies. Primary