The present thesis explores the internationalisation of firms in relation to region- sector characteristics. We focus on outward investment by German firms and classify the heterogeneity across firms, regions and sectors, as well as foreign destinations. The thesis is structured in 5 chapters: a general introduction, followed by 3 empirical chapters and a final conclusion. In the introductory chapter we provide a general conceptual framework and selective review of the literature. Our starting point is that internationalisation is heterogenous across firms as it requires ownership advantages. However, the source of these is less explored and we discuss how regional factors such as the proximity to MNEs can influence foreign expansions. Conceptually we rely on spillover and competition effects and put forward that MNEs can act as catalysts for internationalising domestic firms.