HORIZONTAL RELATIONSHIPS EFFECT ON COMPANIES INTERNATIONALIZATION Competitive paper “Understanding internationalization of the firm in an internationalizing network context” Jose Novais Santos 1 js@phd.iseg.ulisboa.pt Cristina Baptista 1 cristinabaptista@iseg.ulisboa.pt 1 Lisboa University – ISEG, Lisbon School of Economics and Management, Management Department; ADVANCE Research Center, Rua do Quelhas, no. 6, 1200-781 Lisboa, Portugal; Tel.: + 351 213 925 800/900; fax: + 351 213 925 850 ABSTRACT This paper aims to address the effects of company horizontal interactions on the internationalization process, particularly on new market entries. Internationalization is frequently referred as one of the benefits of cooperative horizontal relationships, namely of competitors strategic alliances. Research often neglects how intercompetitor interaction takes place and how it affects a new market entry. Taking the IMP approach, this study focuses mainly three interaction processes: informational and social exchange, adaptation and coordination. A multiple case study strategy was conducted in order to pursue the objective of this study. It considers the Portuguese pharmaceutical industry. Data was collected mainly through interviews and complemented by observation and secondary data. Through a multiple case study focusing on intercompetitor interaction, this research reveals new insights on the internationalization of partner companies. Companies’ interaction includes cooperating practices, ranging from the definition of target markets or regions to the strategy of entry in a new market. Nevertheless, opportunistic behaviour may occur after the entry of a compatriot producer in the new market. Companies also interact aiming to reduce costs and overcoming foreign countries’ entry barriers. Keywords: internationalization, horizontal relationships, intercompetitor interaction