In order to analyze the impact of internationalization on national institut
ions, methods of measuring the degree of internationalization are required.
The article presents a method for measuring the degree of internationaliza
tion of firms. We assume that the internationalization of firms has several
dimensions which cannot be combined into one index, and therefore, have to
be distinguished. The first dimension refers to the production activities
of firms abroad; the second is measured by the proximity of the firm to int
ernational capital. Using a group of the 100 largest German companies both
dimensions are empirically tested. Factor analysis supports the assumption
that both dimensions, the product-oriented and the financial dimension, do
not co-vary and can be separated. Using the measurements we can rank firms
into higher and lower degrees of internationalization.