The Role of Local Municipalities in the Promotion of the Internationalization of Firms

This study intends to establish a bridge in the review of the literature on internationalization of firms and decentralization. It focuses on Portugal, a small European country where internationalization is at the fore of the country's political agenda as a means to overcome the economic crisis, and where regional decentralization is still an unresolved issue. Analyzing, based on direct enquiries, the involvement of Portuguese municipalities in activities to promote economic development and the firms' evaluation of these activities, the aim of this research is to rethink internationalization promotion policies on a territorial/local basis. The obtained results show that the financial, geographical and economical context of the municipalities, as well as the existing human capital and business activity, are relevant factors to explain the involvement of Portuguese municipalities in the decentralization of these activities. The general appreciation made by firms is also positive. However, despite the apparent motivation of local political authorities to be active agents in this area, they seem to lack of the necessary conditions to provide that service with the desirable efficiency.