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Abstract. Sullivan's 119941 suggestion that an index measure of the internationalization construct is superior to single-variable measures is critiqued on psychometric, content validity, criterion validity, reliability, and utilitarian grounds. We argue that internationalization is more complex than envisioned by this index and suggest that further refinement of the construct is necessary before constructing indices.
Sullivan's [1994] article in the Journal of International Business Studies offers a persuasive reminder that conceptualization and measurement of the degree of firm internationalization remains a central area of research inquiry. We fully agree with the contention that although this area has been the subject of numerous theoretical and empirical studies, very little substantive progress has been made. As Sullivan [1994] rightly observes, the lack of significant progress is largely a function of the absence of reliable, definitive measures of the phenomenon of internationalization. Researchers examining these issues have tended to choose measures based on data availability rather than conceptual reasoning. Most studies have relied on measures such as foreign sales as a proportion of total sales (FSTS) to characterize the internationalization construct, a measure that "is intrinsically unreliable and has, at best, speculative validity" [Sullivan 1994: 330]. Sullivan argues that this has led to empirical disarray and "we are unable to state with certainty that international diversification will improve firm performance" (p. 330). His development of a multi-item aggregate index to measure the degree of internationalization (DOI^sub INTS^) represents a novel approach to remedy some of these shortcomings. While the attempt to develop such an index is indeed noteworthy, it is constrained by several theoretical and methodological issues that limit its utility.
In the spirit of spurring intellectual debate, this comment identifies some of the major issues that must be addressed if an index of internationalization is to be developed. The comment focusses on the utility of the index, the conceptual questions raised, and the methodological obstacles that need to be surmounted. These observations go beyond merely identifying the key issues associated with Sullivan's [1994] contribution to direct attention toward the nature of the internationalization construct and the range of problems that arise in the conceptual development of an index.
CONCEPTUALIZING THE DEGREE OF INTERNATIONALIZATION
The rationale for an aggregate index of the degree of internationalization is its potential...