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The Psychic Distance Postulate Revised: From Market Selection to Speed of Market Penetration

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  • Pia Arenius

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    Abstract

    In this paper we revise the psychic distance postulate of the Uppsala Model (Johanson and Vahlne, 1977, 1990) by injecting more recent findings (i.e., distinguishing between selection of foreign markets and time needed to achieve sufficient penetration in foreign markets and the role of social capital). The model we propose posits that a higher psychic distance decreases the speed of market penetration. On distant markets, internationalizing technology-based ventures need more time to establish a position in the foreign network and to obtaining positive cash flow. Our model presents social capital as a mean to overcome the psychic distance and to increase the speed of market penetration. We build our model on four case studies on technology-based new ventures internationalizing at very early ages. Copyright Springer Science + Business Media, Inc. 2005

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    File URL: http://hdl.handle.net/10.1007/s10843-005-4203-6
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    Bibliographic Info

    Article provided by Springer in its journal Journal of International Entrepreneurship.

    Volume (Year): 3 (2005)
    Issue (Month): 2 (June)
    Pages: 115-131

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    Handle: RePEc:kap:jinten:v:3:y:2005:i:2:p:115-131

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    Web page: http://www.springerlink.com/link.asp?id=112039

    Related research

    Keywords: Uppsala model; psychic distance; speed of market penetration;

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    Cited by:
    1. Luna SANTOS ROLDÁN & Guzmán Antonio MUÑOZ FERNÁNDEZ, 2013. "Should Be A Process The Internationalization Of A Firm? Born Globals As An Exception," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(2), pages 135-146.

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