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“The Financial Benefits of Internationalization for the Dutch Cutter
Fishery Industry: An Explorative Study.”
By
Peter van de Laar S1302159
University of Groningen Faculty of Economics and Business
Msc International Business and Management And
Msc International Financial Management
February 2009 Oude Kijk in ’t Jatstraat 59a
9712 EC Groningen 06-14963155
ABSTRACT
The aim of this research is to explore the relationship between internationalization and the (financial) benefits for the Dutch cutter fishery industry and explain the underlying rationale of the relationship. The case study is done through the use of personal interviews, desk research and the analysis of archival documents concerning the industry. The benefits have been investigated from two aggregation levels; micro and macro level. The financial benefits of internationalization for this industry on micro level can be explained by risk reduction, economies of scale, flexibility of resources, and learning effects. The potential benefits on macro level are the increased influence on the international market and research and development.
Keywords: financial benefits, internationalization, drivers, underlying rationale
First Supervisor: Dr. C. Dörrenbächer
TABLE OF CONTENT
INTRODUCTION 4
1. THE DUTCH CUTTER FISHERY INDUSTRY 9
INTRODUCTION
In 2005 the Dutch Minister of Agriculture, Nature and Food Quality appointed a special working group: the Task Force Durable North Sea Fishery, because the economic situation of the North Sea fishery was deteriorating. The aim of this Task Force was to come up with an advice to develop an economically as well as an ecologically durable perspective for the Dutch cutter fishery. One of the outcomes of the Task Force was that there might be opportunities for the Dutch cutter fishery to improve the financial position on the international market.
As stated in precedent research, the financial position of the Dutch cutter fisheries has deteriorated in the last 10 years. In 1999 the net result of the Dutch cutter industry was 40 million euro, but in 2005 this net result dwindled to -11 million euro (LEI, 2008). The solvability (ratio that is equal to the equity divided by the total equity of a company) has decreased from 15 % in 2004 to 0% in 2005. The solvability is used to see what percentage of the total equity is covered by equity and what percentage is covered by debt. In other words, in 2005 the average Dutch cutter fishery was completely financed by debts. As illustrated in figure 1, the financial position of the Dutch cutter fisheries faced a substantial deterioration since 2001.
Turnover Labor turnover
From figure 1 it can be concluded that one of the reasons for a decline of the net results is the decrease of sales.
Another reason for the deteriorating situation of the Dutch cutter fisheries has been the choice for a specialized fleet in the 1970’s (Task force report, 2006). The essence of the specialization was a new fishing method (“beam trawl”) for which large and powerful ships were needed. The increased oil price in recent years is one of the main reasons for the negative net results of the Dutch cutter fishery industry. Further internationalization may reduce these costs, for example by economies of scale or by cooperating with other European fisheries to generate more efficient manners to catch the fish.
In addition, international quota’s caused a limitation of catches by the Dutch fisheries (Task Force report, 2006). Within all European countries, fisheries were limited to a number of fish to catch; the so-called quota. These were enforced to ensure the sustainability of the amount of fish in the European waters. Through internationalization Dutch fisheries may be able to expand their quota’s, for example by acquiring other European fisheries and catch “under the flag” of this other country.
Problem indication
The Task Force may have indicated that some opportunities for the Dutch cutter fisheries may lie on the international market, the exact underlying rationale for the financial improvements is lacking. Therefore this research aims to investigate the underlying rationale for the financial improvements of internationalization for this particular industry.
A secondary aim of this research is to generate a review of the existing literature on the internationalization-performance relationship, and additionally the underlying rationale for the relationship, in order to investigate the applicability of the theory on the Dutch cutter fishery industry. As a result conclusions can be generated concerning the generalization of the existing academic literature on the internationalization-performance relationship and the underlying rationale for this relationship.
Dissimilarities exist within the academic literature on the internationalization-performance relationship as well as on the underlying rationale for the relationship. Contractor (2003) introduced a three-stage sigmoid hypothesis that explains the dissimilarities, because preceding studies on the internationalization-performance relationship have focused on different stages of internationalization. Each stage has a specific influence on the performance of an internationalized firm.
In order to provide a systematical overview of the Dutch cutter fishery industry, and additionally fulfill the preceding aims of this research, the set up of the research is the following:
Chapter 1 provides an overview of the Dutch cutter fishery industry in three parts. The first part discusses the structure of the Dutch cutter fishery. The second part describes the financial position of the Dutch cutter fishery in more detail. The last part provides an insight into regulations of TACs and quotas that are of substantial influence to the specific industry.
Chapter 2 focuses on the theoretical background of this research. In the first part of this chapter a literature review is provided concerning the internationalization-performance relationship and the shape of the relationship. The second part concerns the existing academic literature on the theoretical rationale for the relationship between internationalization and performance.
Chapter 3 consists of the research methodology. The first part discusses the research design and the second part the realization of the sample selection.
Chapter 4 provides the results of the research. The results indicate the drivers (not) to internationalize and the benefits/advantages of internationalization that can be distinguished within the specific industry.
Chapter 5 consists of the discussion on the results. Here the empiric results are integrated within the theoretical background.
An important note is that the research concentrates on the internationalization of an industry. As the internationalization can be defined broadly, it is necessary to clarify the exact meaning of internationalization for this specific industry.
1. THE DUTCH CUTTER FISHERY INDUSTRY
The structure of the Dutch cutter fishery industry
The Dutch sea fleet consists of three segments (Davidse, McEwan and Vestergaard, 1999):
1. Beam trawlers, targeting for flatfish.
2. Distant water freezer trawlers, targeting for herring and mackerel in European waters and for other pelagic species almost world-wide.
3. Smaller multi-purpose vessels and shrimpers, that fish in the coastal area on flatfish, round fish and shrimps.
The first and third segments form the ‘near water’ or the cutter fleet, whereas the second segment forms the distant water fleet. The second segment is active in European waters and outside European waters, where the cutter fleet is solely active in European waters.
The Dutch cutter fishery industry consists of 283 cutter fisheries. The number of Dutch cutter fisheries has decreased in recent years. Table 1.1 shows that in 2000 there were in total 324 cutter fisheries active in the Netherlands, this number fell towards 283 Dutch cutter fisheries in 2006.
TABLE 1.1
Overview of the total number of Dutch cutter fisheries (companies)
2000 2001 2002 2003 2004 2005 2006
Number of cutter fisheries 324 328 323 308 303 288 283
Source: LEI, 2008
A direct cause for the decrease is the decommissioning that has been undertaken by the Dutch Minister of Agriculture, Nature and Food Quality at the end of 2005. The aim of the decommissioning is to improve the sustainable balance between the catch capacities and the catch possibilities for the owners of cutter vessels (Dutch government report, 2008).
For the companies, within the Dutch cutter fishery industry, the most important reasons for the cleansing are the uncertainty concerning the legal amount of fish that they are allowed to catch, the high oil prices, the high maintenance costs, the variability of the fish prices, and the deteriorating image of the industry regarding the sustainability of the amount of fish in the North Sea.
Through the use of the decommissioning the existing cutter fleet is able to catch more fish at lower prices due to the extra available quota and fishing days (LEI, 2007). Table 1.2 shows that in recent years the number of Dutch cutter vessels has decreased from 402 in 2000 to 346 in 2006.
Another reason for the decline of the cutter fleet is the use of Individual Quota Rights (ITQ) used in the Netherlands. These fishing rights enable fisheries to sell their vessels, but retain the quotas for the duration of five years (Davidse, 2000). Therefore these fisheries are able to retain a part of their income by leasing the fishing rights to other fisheries. These regulations have stimulated fisheries to take their vessel(s) out of business and stimulated the decline of the cutter fleet (Davidse, 2000). The last section of this chapter will discuss fishing rights in more detail.
TABLE 1.2
Overview of active Dutch cutter vessels (per 31st of December)
2000 2001 2002 2003 2004 2005 2006
Number of cutter vessels 402 401 393 374 367 342 346
Financial position of the Dutch cutter fishery industry
In the last two years, the net result of the Dutch cutter fishery has become positive again (figure 2). The financial position has slightly improved. In 2007 there even is an increase in turnover. On the other hand, the LEI (2008) explains the improved situation by the executed decommissioning of 2005 and by the decreased oil prices in 2008. The oil costs are around 30-40 % of total revenues of the fisheries and the oil price decreased in 2008 with 4 % compared to 2007 (LEI, 2008).
Turnover Labor turnover
Net result
Figure 2 Trends in results of the cutter industry Source: LEI, 2008
The mean long-term debt per company Solvability
Figure 3 The debt and solvability (based on data from 1 January of the specific year) Source: LEI, 2007
As the net results are positive in the years 2007 and 2008, the solvability is improving. Since 2005 the long-term debt has decreased 15 % from 260 million euro in 2005 to 233 in 2007 (table 1.3).
TABLE 1.3
Overview of total long-term debt of the last 7 years (x 1 million euro)
2001 2002 2003 2004 2005 2006 2007
Total long-term
debt 185 239 235 248 260 242 233
Source: LEI, 2008
However the total long-term debt is still around the level of debt in 2003, in which year the solvability decreased from circa 30 % to 15 % (figure 1.3). So, though the financial position of the Dutch cutter fishery industry has improved slightly in the last two years, the situation is still worrisome.
TACs and Quotas
The TACs (Total Allowable Catches) were introduced in 1983 when the Common Fishery Policy (CFP) was implemented by the European Union. The CFP establishes annual TACs for almost all commercial fish types that are landed by the vessels of the member states. Every year the Council of Ministers decides on these TACs, which are proposed by the European Commission (Davidse, 2000). These propositions are based on the advices of the international Council on the Exploration of the Sea (ICES), the Scientific Technical Economical Committee on Fisheries (STECF) and the Regional Advice Committee for the North Sea (Annual Fishery Book, 2008).
Each member state has its own management system in order to fulfill its TAC obligations. Therefore the fisheries have to work with quotas or the right to fish with a defined, limited amount of capacity. The next section discusses the distribution of three European member states (the Netherlands, the UK and Denmark) as these three countries represent three different methods to allocate property rights.
The Dutch case
Individual vessel quota (IQs) for sole and plaice had already been introduced in 1976 by the North East Atlantic Fishery Convention (NEAFC), but the enforcement of the quotas was rather weak in those years (Davidse, 2000). In the period 1976-1984 the quota were regarded as not much more than a piece of paper and the fisheries perceived the IQs more as limitations than as rights.
Since 1993, the Dutch cutter fisheries have pooled their rights in eight co-management groups (nowadays reduced to six groups) which are responsible for the compliance with the totals of the individual member quotas. The transfers of these rights between members have resulted in high prices. Due to the high price level, fisheries have bought fishing rights abroad or re-flagged their vessels mainly to Belgium, Germany and the UK (Davidse et al., 1999). This view is supported by the President of the Dutch cutter fishery confederation. The re-flagging of vessels in order to acquire foreign quota is called quota-hopping (Symes, 1998).
The Dutch fishing sector is the only member state within the EU that operates under an Individual Transferable Quota (ITQ) system (Davidse, 2000).
The Danish case
In Denmark the quotas are allocated to individual vessels through ratios for a period of 3 months, which secure a spread of fishing activities over the year. All fishermen who are entitled to fish have a right to such a ratio, but the right is not transferable. The more fisheries are active, the smaller the ratio for each fishery as the amount of the ratio depends on the number of fisheries that participate in a specific fishery. As the rights are not individually allocated, the rights do not have the character of property rights, but the ratios can rather be characterized as use rights (Davidse et al., 1999).
The UK case
The UK property rights system can be situated between the systems of the Netherlands and Denmark. The rights are individually owned to an important extent, but ownership by Producers Organizations (PO) also occurs. The rights can be characterized as a kind of common property (Davidse, 2000). In most cases the rights (track records, licenses and vessel capacity units) are connected with the vessel. However, the rights can be identified separately by selling vessels and disconnecting the right from the vessels (Davidse, 2000). Therefore it is possible for fisheries to acquire UK quota without acquiring a complete vessel. This is in contrast with Germany where the rights can not be identified separately from the vessel.
Within the three countries there is a shift towards private rights (Davidse et al., 1999). The national distribution of the EU TACs by the Council of Ministers is based on the relative stability principle; therefore each member state nowadays still has some autonomy in the choice of distribution system of the fishing rights within the national borders. But the accommodation of ‘free movement of capital, goods and services within the EU’ is realized by allowing foreigners to buy parts of the national rights, either directly or by taking over national fishery enterprises.
The shift towards private rights is a development that threatens smaller coastal communities (Davidse et al., 1999). However, a move towards private rights may also include communal ownership of rights that may create possibilities for such communities to defend their interest against large firms (Davidse, 1999).
2. LITERATURE REVIEW
Relationship Internationalization and Firm Performance
In the literature there has been extensive research regarding the relationship between internationalization and performance. Some researchers have found a positive relationship between internationalization and firm performance (Delios and Beamish, 1999; Lu and Beamish, 2001; Contractor, 2003), but there is no consensus in the literature about the shape of the relationship. Geringer (2000) found that the internationalization process has instable performance implications over time. Contractor (2003) gave an overview of the precedent literature concerning the relationship between internationalization and performance, which is shown in table 2.1.
TABLE 2.1
Previous literature on the link between performance and degree of multinationality
Relationship Internationalization and Performance of SME’s
As business is becoming more global and more integrated, SME’s have pro actively or passively sought to expand into international markets (Gankema, Snuif and Zwart, 2000). Kuivalainen and Sundqvist (2006) found differences in the internationalization-performance relationship of small and large firms. They found that for large firms higher internationalization intensity only reflected better profit performance, while for small firms a higher internationalization theory means a better sales performance, a better profit performance and indirectly also a better efficiency performance.
Few studies have focused on the relationship between internationalization and firm performance of small and medium-sized firms (Lu and Beamish, 2001; Chiao, Yang and Yu; 2006). In addition to this, the few findings on small and medium-sized businesses are inconsistent. In the literature some studies found a positive linear relationship (Qian and Li; 2003, Dhanaraj and Beamish; 2003,), while other studies found a negative slope (e.g. Denis et al. 2002, Click/Harrison 2000), a U-curve (Ruigrok and Wagner, 2003),or an inverted U-curve (Lu and Beamish, 2001; Qian, 2002). Lu and Beamish (2001) argue that in the initial stage of the internationalization the performance declines due to the liability of foreignness. When the firm has developed new knowledge and capabilities concerning the internationalization, then the performance increases. Eventually the performance will decline due to the complexities of managing many subsidiaries spread over different markets. In addition, Lu and Beamish (2001) found that export intensity was negatively related to performance. This was contrary to the findings of Qian (2002) who found a positive relationship between export intensity and performance.
The first stage is the initial internationalization stage, where a firm starts it first international activities while the firm faces substantial costs to set-up the international activities. The set-up costs consist of learning costs concerning the new culture and nation (Doz, Santos and Williamson, 2001) and the liabilities of foreignness regarding the unfamiliarity with the foreign market’s institutions (Zaheer and Mosakowski, 1997). The first stage can be recognized as a negative slope, where the set-up costs will show a decline in performance.
In stage 2 the international activities will begin to yield incremental benefits and these benefits will eventually outweigh the set-up costs. This situation is reflected in the U-shaped curve. While stage 2 is characterized by an incremental increase of benefits, this stage can also be categorized as the positive linear slope of the internationalization-performance relationship.
In stage 3 the increase of benefits will stop at the point where the firm becomes over-internationalized and this leads to a reduction in profits. The reduction can be explained by the increase of information and managerial costs (Hitt, Hoskisson and Kim, 1997) and global coordination costs as the economic and cultural diversity increases sharply beyond the top tier markets (Bartlett and Ghossal, 1989). The excessive internationalization is reflected in the inverted-U-curve.
Figure 4 The three-stage sigmoid (S-curve) hypothesis Source: Contractor, 2003
Generally consensus exists that there is a positive relationship between internationalization and performance of SME’s, but this relationship may face initial internationalization costs (stage 1) or may face the costs of the complexities of internationalization (stage 3) as shown in figure 4.
The Theoretical Rationale of the Relationship between Internationalization and Performance
Hennart (2007) performed a critical review of the theoretical rationale for the positive relationship between international diversification and performance. Firstly Hennart (2007) reviewed the literature that predicts that international diversification leads to risk reduction. Secondly the author reviewed the three main theoretical arguments that can be distinguished from the literature that predict a positive relationship between international diversification and the firm’s profitability. These arguments are: international diversification makes it possible to achieve economies of scale, provides better and more flexible access to resources, and it allows for more learning.
Hennart states that the majority of internationalization-performance relationship findings are argued to be merely a statistical fit of empirical data that lack convincing theoretical reasoning.
In a response, Contractor critically reviewed the article of Hennart (2007) to study each claim for the negative and positive benefits of internationalization. The articles of Hennart (2007) and Contractor (2007) will be used as a framework to examine the results of this research.
Internationalization and risk reduction
Hennart (2007) argues that MNE’s have a preference for investments in a country within a culturally, geographically and institutionally small distance from their home country as the costs of firm governance rise as the distance increases. Due to this geographical distance, the amount of information, that the management must collect to direct the employees, increases as well as the costs to observe the behavior of employees. Therefore MNE’s may have a preference for nearby countries. On the other hand, culturally, geographically and institutionally nearby countries often have comparable business cycles, which prohibit unsystematic risk reduction (Hennart, 2007).
Furthermore Hennart argues that international diversification will lead to an increase of systematic risk as the foreign exchange risk increases, an increase of political risk as the MNE’s must operate in unfamiliar countries, and the liability of foreignness.
Contractor (2007) partially agrees that MNE’s operate in more or less synchronized business cycles, but he questions if the notion of highly correlated business cycles holds up. Dueker and Wesche (1999) conclude from data from 1979-1999 that the business cycles of France, Italy and Germany are highly correlated with each other, but in fact are less highly correlated with the UK and the US.
Economies of scale
Flexible access to resources
In the internationalization-performance literature it is argued that internationalized firms can be more profitable than non-internationalized firms. The argumentation is that an internationalized firm owns spatially dispersed affiliates providing the firm better and more flexible access to resources. The internationalized firms have better resources or are able to minimize the impact of changes in the environment by shifting production to other locations in their network of foreign affiliates and therefore be more flexible than their non-internationalized rivals. The critique of Hennart lies in the fact that the firms must have similar production activities and excessive capacity in the other countries to shift the production. The costs of the excessive capacity may then nullify the benefits of flexibility.
Another critique of Hennart is that the theory assumes that flexibility can not be achieved by markets, for example by buying extra resources from (foreign) suppliers. If, however, a network of foreign affiliates is able to shift production faster and at less cost than using the market, the internationalized firm becomes more flexible and the flexibility argument holds (Hennart, 2007).
Contractor (2007) states, that Hennart (2007) overlooks the effects of strategic differentiation, first-mover advantages, and the possibility of dominant market shares. Contractor (2007) concludes that an internationalized company, ceteris paribus, is in a better position to use the opportunities of internationalization than the purely domestic or less-internationalized companies.
Learning effect
by combining the geographically dispersed knowledge (Bartlett and Goshal, 1989; Kogut and Zander, 1993). As a firm increases the number of countries where it is active, the firm is able to learn more and therefore the profitability will increase (Hitt, Hoskinsin and Kim, 1997; Ruigrok and Wagner, 2003).
Contractor (2007) argues that knowledge from abroad increases due to the presence in a number of countries. The presence of a firm in several countries enables it to gather foreign knowledge that non-internationalized or less internationalized firms cannot access (Bartlett and Ghoshal, 1989; Kogut and Zander, 1993).
But Hennart states that there is no direct relationship between the number of countries where an internationalized company is active in and the profitability of the firm. Hennart argues that the knowledge may be gathered by a single foreign affiliate if the knowledge is not dispersed geographically. Or, if the knowledge is dispersed geographically, the use of foreign affiliates may not be the only way to collect it. Doz, Dantos and Williamson (2002) conclude that the necessity for firms to learn from outside their network of foreign affiliates increases, for example from customers and suppliers. Hence, firms may be able to gather as much knowledge on their home market as an internationalized firm may gather on foreign markets, if the home market is large enough.
Contractor (2007) agrees that in particular firms situated in smaller nations are able to profit from learning abroad. Conversely Contractor states that the foreign knowledge needs not to be collected by a firm’s own affiliates, but may also be collected through the use of alliances and network relationships (Contractor and Lorange, 2002; Contractor and Ra, 2002) or by local contacts if the foreign market is entered by exporting.
the foreign affiliates and not the other way around (Hennart). Contractor (2007) on the other hand, argues that the reverse flow of knowledge, from the foreign affiliates is growing in importance and it increases the benefit of the internationalized firm.
If a firm is an explorer and the firm implements a transnational model, wherein all the members of a network share the knowledge with each other in both directions, than the access to knowledge increases as well as the profitability of the firm. But Hennart points to the fact that there is evidence that the transnational model is a utopia (Harzing, 1999).
In addition, Birkinshaw and Ridderstrale (1999) found forces in the headquarters (HQ) of internationalized companies that hold back initiatives from subsidiaries. The initiative is seen by the HQ as an alien body that the ‘corporate immune system’ seeks to destroy.
3. RESEARCH METHODOLOGY
Research Design
The aim of this research is to explore the relationship between internationalization and the (financial) benefits for the Dutch cutter fishery industry and explain the underlying rationale of the relationship. Therefore the research question is:
What are the (financial) benefits for the Dutch cutter fishery industry to internationalize?
The research consists of a multiple case study (Dutch cutter fisheries) within a single case study (Dutch cutter fishery industry) where personal interviews, financial and archival documents are incorporated to answer the research question. In addition I have followed a minor internship to explore the social and cultural contexts that are of importance to this industry.
Swanborn (2003) named three important groups of case studies: the studies of author Yin (1984, 1989, and 1993), the studies of Miles and Huberman (1984, 1994), and other diverse qualitative studies. I have chosen the author Yin (1984), and in particular his part about explanation building, in structuring this case study as the Yin studies are characterized by and the most suitable for the explorative research to the solution of explanation problems (Yin, 1984; Swanborn, 2003). In other words, this research explores explanations for the relationship between the internationalization and performance within the Dutch cutter fishery industry.
As the internationalization of the cutter fishery is in an initial stage and as there are no quantitative data available on the performances of internationalized fisheries, difficulties arise in exploring these benefits. In addition the research is executed within a complex industry and precedent academic literature regarding the industry is limited. To overcome these difficulties the research uses the strengths of the case study. A case study enables to investigate a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident (Yin, 1994). Yin (1994) uses these strengths to give a definition of a case study and moreover to distinguish it from other research strategies.
The literature review is used as a means to an end and it supports the research by developing a sharper and more insightful view on the topic. The literature review is used to explain better and categorize the drivers to internationalize and the potential benefits of internationalization. By comparing the outcomes of this research with theories from the existing academic literature, the unique characteristics of drivers and potential benefits within this industry can be identified.
Internationalization is a topic that has both quantitative and qualitative aspects (Martin and Papadoulos, 2006). In order to triangulate the data, a sample of 8 fisheries from a specific industry (cutter fishery) within the Netherlands and a sample of 4 experts have been interviewed in-person to collect quantitative as well as qualitative data. Data-triangulation increases the reliability and validity of the research as measurements are repeated as well as overlapping (Baarda, de Goede & Teunissen; 1997). By including personal interviews, with qualitative as well as quantitative aspects, the research is able to give a better representation of the effects of the internationalization (Cavusgil, 1985; Rahman, 2003).
interviews have the advantage that they allow for a much more detailed analysis on the topic of the research (Baarda, de Goede & Teunissen; 1997; Emans, 2002).
To investigate why the cutter fisheries did or did not internationalize and to indicate the drivers to internationalize, a sample of 8 Dutch cutter fisheries have been interviewed. The interviews did not focus completely on internationalized cutter fisheries. Non-internationalized fisheries may have firm-specific reasons not to internationalize, while they recognize the benefits that can be achieved, or the non-internationalized fisheries may argue that the distinguished drivers are not applicable for this specific industry. Therefore the sample of internationalized as well as non-internationalized may generate more reliable findings compared with a sample of only internationalized cutter fisheries.
The exploration for benefits of internationalization within the cutter fishery industry has been done from two aggregation levels. Firstly the research focuses on the potential benefits of internationalization within this industry on micro level. As stated earlier, the internationalization-performance research can add theoretical rigor through more micro-level studies that focus on narrow industry domains rather than large and broad-based samples (Hennart, 2007).
This means that the focus lies on the financial benefits that can be realized by the cutter fisheries themselves or financial benefits that are firm-specific. According to Swanborn (2003), focusing on low aggregation levels enables a researcher to perform causal analyses in case studies. The (causal) relationships that an individual entity identifies between internationalization and performance can be tested with the outcomes of the other entities. This has been done by interviewing a sample of owners of Dutch cutter fisheries.
middle and north) an internationalized as well as a non-internationalized fishery has been interviewed. This is to ensure that region-specific factors that have been of influence will be integrated into the research. The latter part of the research methodology discusses the choice for the specific cutter fisheries in more detail.
Secondly the research has been done from a high aggregation level (macro level) as qualitative as well as quantitative data have been collected regarding the potential benefits for the Dutch cutter fishery industry at large. To ensure methodical triangulation, both interviews (with the experts) and archival analysis (financial documents concerning the industry) are conducted in this research (Baarda, de Goede & Teunissen; 1997). The experts are assumed to have an extensive knowledge of the industry and moreover it is assumed that this knowledge reflects the overall knowledge within the industry, as the experts represent the (cutter) fishery industry. The outcomes of the interviews with the experts can therefore be used to test the outcomes of the interviews with the owners of the cutter fisheries in order to improve the reliability of the outcomes.
The qualitative data have been collected through in-depth interviews with owners of cutter fisheries, representatives of the Dutch cutter fishery confederation, the “Vissersbond”, and representatives of the complete Dutch fishery industry, the “Productschap Vis”. The experts are considered as key informant, as key informants are socialized and (preferably) prominent members of a group that are the subject of research and are able to provide a substantial amount of data (Baarda, de Goede & Teunissen; 1997).
As the LEI agreed with the participants that firm-specific information will not be distributed to third parties, the LEI will only provide data that consists of mean values of the cutter fishery industry.
A comprehensive research strategy is used as the study relies on multiple sources of evidence, with data needing to converge in a triangulating fashion, and as another result, benefits from the prior development of theoretical propositions to guide data collection and analysis (Yin, 1994). Furthermore the study can be characterized as an intensive study as a small sample size (8 fisheries and 4 experts) is investigated in detail as well as the complex structure of the context of the cutter fishery industry (Swanborn, 2003).
Four sub-questions have been formed to generate results on the preceding issues and, in the end, to answer the main research question:
1. What are the drivers for the Dutch cutter fisheries to internationalize? 2. What are the drivers for the Dutch cutter fisheries not to internationalize? 3. What financial benefits can be derived from internationalization by the
Dutch cutter fisheries on micro level?
Sample Selection
One of the main problems in doing a research on the Dutch “cutter” fishery industry is its closeness. The image of this particular industry is not good and the knowledge of the consumers of the fisheries is very limited due to unstructured internal as well as external communication (De Vos and Hoefnagel, 2006).
I was able to do a minor internship at the Dutch “Vissersbond” in order to contact the Dutch cutter fisheries. Because I could only contact members of the Dutch “Vissersbond” I was limited to a number of 164 cutter fisheries. After determining the total amount of members, I searched together with the Vice-president of the “Vissersbond” for internationalized cutter fisheries. We came to a number of 6 internationalized cutter fisheries of which 5 out of 6 agreed to participate in the research.
Of the 5 internationalized cutter fisheries, 4 of the fisheries are beam trawlers (> 1.501 pk) and 1 out of the 5 is a smaller multi-purpose vessel or a Eurokotter (261-300 pk). According to the most actual overview of the industry of the LEI (Fishery in numbers, 2008) this representation is justified as 81 % of the fishing effort of the Dutch cutter fishery industry consists of beam trawlers and the industry consists of a limited number of Eurokotters.
After determining the internationalized cutter fisheries, I searched for non-internationalized fisheries that could be compared with the non-internationalized fisheries. In finding comparable non-internationalized fisheries I focused on geographically approximate fisheries as well as fisheries that had a comparable size. For both the northern region and the middle region I was able to find non-internationalized fisheries willing to participate that were located in the same village and additionally had vessels of the same size (table 3.1).
25 km) was willing to participate and moreover had a vessel of the same size as the internationalized fishery.
For the western region I was unable to match a non-internationalized fishery with Fishery H. Therefore the results from fishery H will be used for cross-sectional comparisons and analyses with the internationalized and non-internationalized fisheries from the other regions.
TABLE 3.1
Participating cutter fisheries
Name Region Pk Internationalized?
Fishery A North (Zoutkamp) 261 No
Fishery B North (Zoutkamp) 261 Yes
Fishery C Middle (Urk) 2000 No
Fishery D Middle (Urk) 2000 Yes
Fishery E Middle (Urk) 2000 Yes
Fishery F South (Goedereede) 2000 No
Fishery G South (Scheveningen) 2000 Yes
Fishery H West 1501 Yes
Generalization
The sample consists of 8 cutter fisheries while the overall cutter fishery industry consisted of 283 in 2006. The temporary estimation for the year 2007 is that the industry consists of 285 (LEI, 2008). Therefore the sample covers only 3% of the Dutch cutter fisheries.
The coverage of internationalized cutter fisheries is around 40 % of the total amount of internationalized cutter fisheries. As I was limited to the access of one out of in total two organizations that represent the Dutch cutter fishery sector, I had access to 6 internationalized cutter fisheries. 5 out of the 6 cutter fisheries were willing to participate.
According to the estimation of the experts these 5 fisheries cover at least 40 % of the total amount of internationalized cutter fisheries within the Netherlands. Generalizations concerning the (potential) benefits of internationalization for Dutch cutter fisheries can be made as at least 40% of the internationalized Dutch cutter fisheries are included into the research. By including the benefits on macro level, based on reports concerning the industry and the opinion of the experts, the generalization of the research is further improved.
4. RESULTS
Drivers of Dutch Cutter Fisheries to Internationalize
Cheaper resources
From the interviews with the fishermen it can be concluded that the most important driver to internationalize is the gathering of cheaper resources in order to have a larger amount of quotas. 7 out of the 8 fishermen named cheaper quotas on the international market as a driver to internationalize.
The importance of this driver is confirmed by the experts, as all of them pinpointed cheaper quotas as one of the main drivers to internationalize. Especially in the mid 1990’s there was a substantial shortage of quota within the Netherlands. In addition the quota of geographically proximate countries, particularly within Belgium, Germany and the United Kingdom, were underused.
According to the President of the Dutch cutter fishery confederation, the reason of the under usage was the substantial lower level of competition within these countries compared to the competition within the Netherlands. The result of the under usage of these quotas, was that prices for quota within these countries decreased as prices within the domestic market faced a substantial increase. Fishermen were able to buy more quotas at a lower price through internationalization.
Expansion
Another important driver that can be distinguished is the opportunity to expand their business activities.
Due to the shortage of quotas on the domestic market (especially in the mid 1990’s) fisheries faced a substantial competition in maintaining the same amount of quota or were not able to maintain the same amount of quota due to the extensive high prices for quota on the domestic market.
On the other hand, there are fisheries that were able to maintain the same amount of quota, but these fisheries wanted to increase their sales through the expansion of their business and therefore needed to enter the international market to enable the expansion.
In support of this the President of the Dutch cutter fishery confederation states that Dutch fisheries are not able to expand their businesses due to the shortage of quotas on the domestic market. If the fisheries want to expand, they have to internationalize. 2 out of the 5 internationalized fisheries considered internationalization as a way to expand their businesses.
Spreading of risk
As stated earlier in the section concerning the TACs and quotas, each member state has its own distribution system of the fishing rights. Whereas in the Netherlands the fishing rights are private property, within Denmark these rights are state property. By internationalization the fisheries are not dependent on a single management system of fishing rights and therefore the fisheries reduce their risk by spreading their fishing rights over multiple countries with different management systems.
Another reason that was pinpointed by a fishery is the improved ability to spread catches over different areas and therefore the ability to realize product diversification. Because a fishery is able to use foreign quota, the variety of fish that it is allowed to catch increases as well. Due to the increased variety, the risk of selling the fish at low prices decreases, as the fishery is able to shift the catch between different fish types when the price of a certain fish type is too low to be profitable. This advantage can be seen as a result of the flexibility of resources. However the essential difference is that this argument focuses on the reduction of risk concerning the national (international) price level instead of focusing on the achievement of more or better resources.
Flexibility of resources
To be able to be more flexible in the production of a variety of fish types, fisheries need to have different kinds of fish types within their quota. As the availability of quota of certain fish types differ in each country, the price differs too.
By buying the resources on the international market, the variety of products of the fisheries increased. The fisheries were hereby able to shift the catch of a certain fish, if they had the impression that in the area where they were fishing this fish was very difficult to catch, towards another fish that could be caught more easily and in larger amounts.
Table 4.1 shows the specific drivers of each fishery to internationalize.
TABLE 4.1
Overview of driver(s) to internationalize for each fishery
*=internationalized Cheaper resources Expansion Spreading of risk Flexibility of resources Fishery A X Fishery B* X X X Fishery C X Fishery D* X X X X Fishery E* X Fishery F X Fishery G* X Fishery H* X X
Drivers of Dutch Cutter Fisheries not to Internationalize
Unfamiliarity with foreign market
The main argument for fisheries not to internationalize is the lack of knowledge concerning the foreign market. Fisheries face language problems in establishing foreign contacts and additionally the fisheries have little or even no experience with the legal environment of the specific country. Therefore the fisheries have difficulties in entering the international market as within each country there are different conditions to enter the market.
In Germany for instance a fishery needs to acquire a complete vessel in order to be able to obtain German quota, while in the UK fisheries are not compelled to acquire a vessel in order to obtain UK quota. Furthermore the legal context of the fisheries in each different country is very complex and the discussion of each legal environment in detail goes beyond the scope of this research.
A notable finding is that fisheries are focusing on geographically approximate countries compared to the specific region within the Netherlands. Fishery B, situated in the north of the Netherlands, has its main international activities in Denmark (which is situated to the North of the Netherlands), while fishery G, located in the south of the Netherlands, has focused mainly on the countries Belgium and France. Both fisheries indicated informal contacts as well as a (limited) understanding of the specific language as important reasons to overcome the obstacles to enter the foreign markets.
Lack of financial capital
Only one fishery (F) named the lack of financial capital as a reason not to internationalize. The fishery indicated that within the cutter fishery industry the lack of financial capital was one of the main reasons for Dutch cutter fisheries not to internationalize. This is not supported by the empirical evidence from the interviews with the cutter fisheries from this sample.
Increased risk
While the lack of financial capital seems to be an obstacle of minor influence, the increased risk due to higher (fixed) costs seems to be a more relevant issue from the results of the interviews (table 4.2). 3 out of 8 fisheries named increased risk as a motive not to internationalize and for 2 out of the 3 non-internationalized fisheries in the end it was one of the (two) reasons not to enter the foreign market.
The fisheries explained the increased risk by the necessity to invest in extra quota (or an extra vessel in the case of Germany) or extra personnel to carry out the foreign business activities. These investments would increase the risk that the costs of internationalization outweigh the benefits and result in a loss of capital.
TABLE 4.2
Financial Benefits from Internationalization by Dutch Cutter Fisheries on Micro Level
Risk reduction
The preference of international active companies for investments in a country within a culturally, geographically and institutionally small distance from their home country as stated in the literature is supported by the results. The northern fishery (B) invested in Denmark, the southern fishery (G) mainly in France and Belgium and the fishery (D) located in the middle of the Netherlands invested in Germany.
The critique that these countries have overlapping business cycles can be refuted by the fact that the types of fish that can be acquired (through acquisition of international quota) differ as well as the amount of available quota differs between the countries. Therefore the fisheries are able to reduce their risk in terms of the supply of quota and the variety of quota (different types of fish) and the risk concerning t he (inter)national price level of the fish types.
As a result the fisheries are able to implement product differentiation through international differentiation. The question if product differentiation can also be achieved on the domestic market can be answered positively. However the internationalized fisheries are in a better position to do so as the variety of quota is clearly larger on the international market than on the domestic market due to the different management systems of fishing rights between member states.
quotas is high within the domestic market, it becomes difficult and costly to acquire extra quota of these types of fish.
Furthermore the internationalized fisheries B, D and G experienced a decrease in risk as the fisheries relied on quota from multiple countries instead of quota from a single country. Or in other words, the internationalized fisheries have multiple country production sources as suggested by Contractor (2007).
Disadvantages such as an increase in systematic risk due to an increase of the foreign exchange risk or political risk were not mentioned by the fisheries. This can be explained by the harmonization of the European Union, as the Euro is the only currency within member states of the EU and the majority of the rules concerning the Fishery are implemented by the EU. As stated earlier, the quota are based on country-specific factors and therefore the amount and variance of these quota differ between European member states and therefore it allows for the reduction of unsystematic risk.
In the case of Germany, the benefits of international diversification may be nullified by the necessity of acquiring a complete vessel in order to acquire quota. The acquisition of the vessel may result in an overcapacity and therefore the increased fixed costs may cancel out the benefits of product differentiation and the flexibility advantage (Contractor, 2007).
Economies of scale
The literature states that economies of scale can be achieved when fixed costs can be spread over international markets as long as the home market is smaller than the MES. The difficulty of the MES is its measurability.
this view. The president of the Dutch cutter fishery Confederation states that due to the shortage of domestic quota, fisheries are unable to expand, unless they internationalize.
The fisheries B, D, G and H experienced economies of scale (table 9) through the coordination and administrative benefits as they were able to manage multiple vessels. For example the management of the personnel and the maintenance activities of the vessels could be combined instead of management activities per vessel. The management activities can be executed by managers or even by the chief executives of each fishery.
A comment of fishery D was that the fishery concentrated its international activities solely in Germany. The reason for the concentration is that administrative and coordinative complexity will increase as the fishery enters more countries.
Fishery H claimed additional economies of scale due to the possibility of an internationalized fishery to buy larger amounts of quota on the international market (UK). The available amounts of quota are more extensive and less expensive in the UK compared to the Netherlands. When a fishery is able to produce (catch) more fish with a single vessel, the fixed costs per unit of fish decrease.
Besides the ability to produce more, the acquisition of UK quota is less expensive which results in an additional decrease in costs per unit of fish compared to the costs of a fishery that relies solely on domestic quota (Netherlands).
Flexibility of resources
All the internationalized fisheries from the sample experienced benefits from an increased flexibility of resources due to internationalization (table 4.3). This can be explained in the first place by the access to better resources through the entrance of foreign markets. Due to the lower prices of quota on the international compared to the domestic market, the resources are per definition better as the internationalized fisheries pay lower prices for equal resources.
The second explanation is more complicated. In order to be able to minimize the impact of changes from the environment, the fisheries must be able to shift production within their network of affiliates. Basically fisheries are not allowed to exchange private quota between countries. But fisheries G and H state that when a fishery is active in both countries, the exchange of quota is tolerated. However this tolerance only concerns the exchange of private quota between the Netherlands, the UK and Germany. In Denmark for example, the situation is more complicated as the fishing rights are state property instead of private property.
The production methods are (mostly) similar in other countries, because the methods that were implemented originated from the domestic country (Netherlands). This enables internationalized fisheries to shift production within their network of foreign affiliates and creates a distinct advantage for the internationalized fisheries.
As the foreign resources are better (less expensive) and provide an increased flexibility, the benefits seem to outweigh the costs of internationalization. In the case of the acquisition of German quota, fisheries are obliged to buy a German vessel and this may result in an excessive capacity. The costs of the excessive capacity may than nullify the benefits of the increased flexibility (Hennart, 2007).
quota (UK) as domestic quota were too difficult and too expensive to obtain. By entering the international market fishery E was able to obtain the amount of quota to continue its business activities
In the mid 1990's two of the three non-internationalized fisheries (C and F) had to sell one of the two vessels, as they did not posses enough quotas for the continuance of two vessels. The result was a decrease in sales for both fisheries. The chief executive of one of these non-internationalized fisheries (F) even declared that he still regrets the decision not to have internationalized during the mid 1990’s.
Learning effect
None of the internationalized fisheries had the initial drive to obtain knowledge from abroad (table 7). The fisheries aimed at the exploitation of the internal capabilities in other countries and therefore the fisheries can be characterized as exploiters.
According to Hennart (2007) the profitability will be larger, when the intangibles will be exploited with as little local adaptation as possible. The fisheries E and H share this point of view and see no opportunities to extract knowledge from abroad (table 9). Especially fishery E is purely an exploiter as the only intention of the fishery was to get access to more and cheaper resources and, after some years of international experience, experienced no other benefits.
The knowledge of fisheries E and H is dispersed throughout the organization solely top down in order to achieve as much economies of scale as possible.
foreign market as a major opportunity, whereas fishery D experienced it as a minor advantage.
The differences between the fisheries can be explained by country-specific factors. The technical/nautical development of the Dutch cutter fishery is in a further stage than the German cutter market, due to the minor influence of the cutter fishery within Germany. Furthermore the high competition within the Netherlands has accelerated the technical development of the cutter fishery industry. According to the experts the technical development of the UK, Germany, France and Belgium concerning the (cutter) fishery is lagging behind compared to the development of the Netherlands.
On the other hand, the nautical development of the Danish fishery sector is equal to the Netherlands or may even be in a further stage as the nautical history has been of major influence within Scandinavian countries. Within these countries there is complementary knowledge with regard to the knowledge in the Netherlands. As a result fishery B, active in Denmark, is in a better position to obtain advantageous knowledge than fisheries D (active in Germany) and G (active in France and Belgium).
Still fisheries D and G benefit from learning effects. The fisheries advocate the gathering of international experience. They find themselves in a better position compared to non-internationalized competitors to enter foreign markets as they are able to enter the markets more quickly and against lower costs.
TABLE 4.3
Overview of experienced benefits by internationalized cutter fisheries
Risk reduction
Economies of scale
Flexibility of
resources Learning effects
Fishery B X X X X
Fishery D X X X X
Fishery E X
Fishery G X X X X
Fishery H X X
Financial Benefits from Internationalization by Dutch Cutter Fisheries on Macro Level
On macro level two potential benefits for the Dutch cutter fishery industry have been identified by the experts. According to the Chairman of the Dutch cutter fishery confederation, influence on the international market and R&D are of overriding importance for the Dutch cutter fishery industry.
Increased influence on international market
As the European Union is responsible for the distribution of the fishing rights to the different member states, the Dutch cutter fishery depends heavily on the decisions of the European Union concerning the distribution of these quotas. Therefore the experts unanimously pinpoint an increased influence within the EU as a major importance for the future of the Dutch cutter fishery industry. The experts explained this importance by the European distribution system of the property rights.
Table 4.4 gives an overview of the percentages of the Total Allowable Catches within the EU of three types of fish that are reserved for the Dutch cutter fishery market (Dutch quota). The Netherlands have the fishing rights for nearly 75 % of all the sole that is allowed to be caught by the EU member states. In addition the Netherlands are a major stockholder of the Allowed European plaice catches.
On the other hand, the Netherlands are a minor stakeholder concerning the fishing rights of cod. In this way, the Netherlands nowadays stand alone particularly in defending the interests of sole fisheries and in defending the interests plaice fisheries.
TABLE 4.4
Overview of European Tacs and Dutch quota (x1000kg):
Type of fish Area TAC 2008 Dutch quota TAC 2007 Dutch quota
Percentage Dutch quota (2008)
Sole North Sea 12800 9563 15020 11226 74,71%
Plaice North Sea 49000 18414 50261 18901 37,58%
Cod North Sea 22152 2125 19957 1914 9,59%
Source: Fishery; Annual Book 2008
According to the chairman, the influence of Dutch cutter fisheries can be increased because of the fact that the Dutch cutter fisheries are able to enter a foreign country and with that are entering a foreign PO. The foreign PO represents the interests of their domestic and international members.
When the Dutch cutter fishery industry further internationalizes, the industry is able to improve the representation of the interests as more countries represent the sole and plaice industry. The harmonization of interests enables an enlargement of the influence of the Dutch cutter fishery industry on the international market (EU).
regulations causes a decrease in the internationalization costs of the Dutch cutter fisheries. Furthermore the harmonization of regulations enables fair competition and disables protectionism. For example, within the Netherlands the personnel of a vessel must consist of a minimum of three employees, while in Germany the required minimum is two employees. Another example is that a Dutch cutter fishery that acquires a Belgium vessel is prohibited to exploit the vessel for 8 months. These differences in regulations cause an increase in costs for the complete Dutch cutter fishery sector as well as for the European fishery industry as the optimum efficiency of competition between fisheries can not be achieved.
An important notion of the President of the Dutch fishery sector is that the aim for increased influence can be counterproductive. The reason is that the foreign POs may see the Dutch cutter fisheries as a threat in a sense that the Dutch cutter fisheries aim to take away fishing rights from the domestic industry. Therefore these member states may be inclined towards voting against the interest of the Dutch cutter fishery industry.
Research and development
In order to analyze the possibilities of improved research and development, financial capital is a decisive factor. Table 4.5 summarizes the investments that have been made by the Dutch cutter fishery industry in recent years as well as the amount of long-term debt that characterizes the current financial status of the Dutch cutter fishery industry.
TABLE 4.5
Investments and debt within the Dutch cutter fishery industry (x million euros)
2001 2002 2003 2004 2005 2006 2007
Investments 31 32 32 21 6 25 4
The investments have decreased sharply since 2003 with the exception of 2006 (table 4.5). The total long-term debt has decreased since 2005. Both the increase in investments in the year 2006 and the decrease of the total long-term debt are the results of the decommissioning at the end of 2005 (Fishery in numbers, 2008). Due to the decommissioning, vessels were decommissioned by the government and as a result the overall financial position of the Dutch cutter fishery improved as some fisheries became more liquid and therefore were able to increase their investments.
However, after the non-recurrent improvement, the investments decreased again to 4 million euro. Furthermore the investments made are primarily centered on the adjustment of fishing methods. In other words, the investments within the industry are based on the implementation of new techniques. The investments of fisheries consist for a small part of research and development of new fishing methods.
To stimulate the R&D of new fishing methods, the Dutch government introduced the implementation of certain ‘knowledge circles’ or knowledge centers consisting of academic researchers and fishermen. By reinforcing the entrepreneurship, the Dutch cutter fishery industry aims to make optimum use of the knowledge that exists within the industry. The academic researchers need to structure these knowledge centers and extract the knowledge from the fishermen.
The experts see a further internationalization as a chance to broaden the knowledge that exists within the Dutch cutter fishery industry. As the Dutch cutter fisheries have more dispersed foreign affiliates, the industry is in a better position to gather the geographically dispersed knowledge.
5. DISCUSSION
Shape of internationalization-performance relationship
The outcomes of this research partly support the three-stage sigmoid hypothesis of Contractor (2003). Indeed, multiple stages can be identified in the relationship between internationalization and performance. The outcomes of the research suggest the support of the positive slope of stage 2 as well as negative slope due to over-internationalization of stage 3.
All the internationalized fisheries experienced at least one clear benefit of internationalization against a disadvantage of less importance to the individual fisheries. In other words, the outcomes suggest a positive relationship between internationalization and performance within the Dutch cutter fishery industry based on the experience of 5 internationalized fisheries.
Furthermore the outcomes of 3 out of the 5 internationalized fisheries provide a support for the positive relationship between internationalization and performance as the fisheries experienced benefits due to risk reduction, economies of scale, flexibility of resources and learning effects. Other direct benefits (on micro level) have not been identified by the internationalized fisheries.
However, the outcomes of this research do not support a negative slope of the initial phase of internationalization for the Dutch cutter fishery. Instead the outcomes suggest a positive slope of the initial internationalization-performance relationship in the case of the UK or at least provide an explanation for a positive slope of the initial internationalization stage (stage 1).
Firstly the outcomes of the research suggest the importance of industry-specific differences that are of influence to the internationalization-performance relationship. Due to the implementation of the TACs and quotas within the EU and additionally the different management systems within the member states, the availability and price of the quota have caused differentiations between countries. As the quota prices within the Netherlands are on a substantial higher level compared to geographically proximate countries, the advantages of entering the foreign market of such a country dominate the disadvantages of entering the market of a geographically close country.
In other words, the industry-specific factors influence the benefits of internationalization as they caused substantial increased benefits of internationalization for the Dutch cutter fisheries as well as decreased benefits for foreign cutter fisheries (as the disadvantages of foreign fisheries to enter the Dutch cutter fishery market dominate the advantages due to higher prices of Dutch quota).
A fishery entering the UK market is even able to catch the UK quota with a Dutch vessel and personnel. While the fishery that enters the German market faces substantial higher investments costs therefore causing that the total costs of the German quota are higher than the UK quota.
Additionally there are differences in the profitability of learning effects, as the technical/nautical knowledge within Denmark is assumed to be more extensive compared to technical/nautical knowledge within Belgium, Germany, France and the UK.
The inconsistency within the literature concerning the shape of the internationalization-performance relationship can not be explained completely by the three-stage theory of Contractor. Industry-specific as well as host country-specific factors are also of influence on the shape of the internationalization-performance relationship.
Underlying rationale for internationalization-performance relationship
The research supports the theoretical rationale described by Hennart (2007) for the positive relationship between international diversification and performance. The theoretical rationale seems to be applicable to the Dutch cutter fishery industry. All the internationalized fisheries named one benefit that can be linked to the theoretical rationale of Hennart; moreover 3 out of the 5 internationalized fisheries experienced all four benefits that are distinguished by Hennart.
