The proposed doctoral dissertation offers a new approach to analyzing firms' business internationalization in the Republic of Croatia based on the dynamic capabilities. For the purposes of the doctoral dissertation dynamic capabilities are defined as a combination of technological and managerial capabilities while business internationalization is conceived with it's narrow meaning, respectively, export businesses and cross-border sales of Croatian firms from Croatian accession to the European Union. Technological capabilities in this study were observed through: investment in technology, investment in research and development, technology solutions and the frequency of new product introductions. On the other hand, managerial capabilities were measured based on managerial knowledge and capacity, comprehesion of international markets and the centralization of decision-making. Also examined is the relationship between technological capabilities and firm's business performance, observed through profit (loss) compared to previous period and the change in revenue, as well as the connection of business performance and the firm's internationalization of business. Thesis explores not only the direct impact of technological and managerial capabilities to the internationalization of business, but also the reverse impact of the internationalization to technological and managerial capabilities of firms'. Is it possible to discern the importance of feedback or what preceded what, is an additional question and also a subject of disertation research.