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Entry into new foreign markets: Performance feedback and opportunity costs

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  • Ref, Ohad
  • Feldman, Naomi E.
  • Iyer, Dinesh N
  • Shapira, Zur

Abstract

To resolve the mixed and sometimes contradictory results regarding the effect of performance feedback on the tendency and timing to expand abroad, we develop a theoretical framework that takes opportunity costs into account. Our findings show a non-linear relationship, mostly an inverted U-shape, between performance both below and above aspiration and entering new foreign markets. Our results also show that industry growth rate moderates this non-linear relationship differently for firms near aspiration (below or above) compared with firms well below or well above aspiration, furthering our understanding of contextual factors and the boundaries of performance feedback theory regarding international expansion.

Suggested Citation

  • Ref, Ohad & Feldman, Naomi E. & Iyer, Dinesh N & Shapira, Zur, 2021. "Entry into new foreign markets: Performance feedback and opportunity costs," Journal of World Business, Elsevier, vol. 56(6).
    • Handle: RePEc:eee:worbus:v:56:y:2021:i:6:s1090951621000699
    DOI: 10.1016/j.jwb.2021.101258
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