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Foreign country priorities in the internationalization process: a measure and an exploratory test on British firms

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  • Clark, Timothy
  • Pugh, Derek S.
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    Abstract

    After a critical analysis of the psychic distance aspect of the Uppsala model of internationalization and empirical studies to test it, this paper proposes a measure to enable comparison between target foreign countries in the priority given them in the internationalization process. An International Priority Index is developed for each target country, and used as the dependent variable in a model to analyze the effects of the independent variables of size of market, affluence of market, geographical distance and cultural distance on foreign country priority choice of home country firms. The measure and the model are given a first test on data obtained from a longitudinal study of the ordering of foreign market entry of 19 British firms. In this study, affluence of market is shown to have more importance than size of market, and geographical distance of country to have greater impact than cultural distance in the choice of ordering of entry.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 10 (2001)
    Issue (Month): 3 (June)
    Pages: 285-303

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    Handle: RePEc:eee:iburev:v:10:y:2001:i:3:p:285-303

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    Related research

    Keywords: Psychic distance Cultural distance Uppsala Internationalization International priority;

    References

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    1. Otto Andersen, 1993. "On the Internationalization Process of Firms: A Critical Analysis," Journal of International Business Studies, Palgrave Macmillan, vol. 24(2), pages 209-231, June.
    2. Shawna O'Grady & Henry W Lane, 1996. "The Psychic Distance Paradox," Journal of International Business Studies, Palgrave Macmillan, vol. 27(2), pages 309-333, June.
    3. William H Davidson, 1980. "The Location of Foreign Direct Investment Activity: Country Characteristics and Experience Effects," Journal of International Business Studies, Palgrave Macmillan, vol. 11(2), pages 9-22, June.
    4. Engwall, L. & Wallenstål, M., 1988. "Tit for tat in small steps: the internationalization of Swedish banks," Scandinavian Journal of Management, Elsevier, vol. 4(3-4), pages 147-155.
    5. Jean-Emile Denis & Daniel Depelteau, 1985. "Market Knowledge, Diversification and Export Expansion," Journal of International Business Studies, Palgrave Macmillan, vol. 16(3), pages 77-89, September.
    6. Kravis, Irving B. & Lipsey, Robert E., 1982. "The location of overseas production and production for export by U.S. multinational firms," Journal of International Economics, Elsevier, vol. 12(3-4), pages 201-223, May.
    7. Prasad Padmanabhan & Kang Rae Cho, 1999. "Decision Specific Experience in Foreign Ownership and Establishment Strategies: Evidence from Japanese Firms," Journal of International Business Studies, Palgrave Macmillan, vol. 30(1), pages 25-41, March.
    8. Håkansson, Håkan & Snehota, Ivan, 1989. "No business is an island: The network concept of business strategy," Scandinavian Journal of Management, Elsevier, vol. 5(3), pages 187-200.
    9. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan, vol. 19(3), pages 411-432, September.
    10. Gabriel R G Benito & Geir Gripsrud, 1992. "The Expansion of Foreign Direct Investments: Discrete Rational Location Choices or a Cultural Learning Process?," Journal of International Business Studies, Palgrave Macmillan, vol. 23(3), pages 461-476, September.
    11. P R Chandy & Thomas G E Williams, 1994. "The Impact of Journals and Authors on International Business Research: A Citational Analysis of JIBS Articles," Journal of International Business Studies, Palgrave Macmillan, vol. 25(4), pages 715-728, December.
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    Cited by:
    1. Pangarkar, Nitin, 2008. "Internationalization and performance of small- and medium-sized enterprises," Journal of World Business, Elsevier, vol. 43(4), pages 475-485, October.
    2. Dimitratos, Pavlos & Amorós, José Ernesto & Etchebarne, María Soledad & Felzensztein, Christian, 2014. "Micro-multinational or not? International entrepreneurship, networking and learning effects," Journal of Business Research, Elsevier, vol. 67(5), pages 908-915.
    3. Quer, Diego & Claver, Enrique & Andreu, Rosario, 2007. "Foreign market entry mode in the hotel industry: The impact of country- and firm-specific factors," International Business Review, Elsevier, vol. 16(3), pages 362-376, June.
    4. Majocchi, Antonio & Bacchiocchi, Emanuele & Mayrhofer, Ulrike, 2005. "Firm size, business experience and export intensity in SMEs: A longitudinal approach to complex relationships," International Business Review, Elsevier, vol. 14(6), pages 719-738, December.
    5. Ruiz de Maya, Salvador & López-López, Inés & Munuera, José Luis, 2011. "Organic food consumption in Europe: International segmentation based on value system differences," Ecological Economics, Elsevier, vol. 70(10), pages 1767-1775, August.

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