Which type of firm expands their sales abroad in response to domestic competition?

The type of firm that expands its sales abroad in response to domestic competition is an international firm. This classification applies to businesses that seek to grow their market presence beyond their home country, driven primarily by the need to remain competitive against domestic rivals.

International firms often leverage opportunities in foreign markets, which allows them to diversify their operations, access new customer bases, and mitigate risks associated with relying solely on the domestic market. This strategic expansion is typically a response to pressures such as market saturation or intensified competition in their home country, prompting them to explore and invest in international markets for growth.

While all types of firms may engage in activities outside their borders, the defining characteristic of an international firm is that its expansion into foreign markets is a strategic move in response to domestic market challenges.