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The role of market orientation, relational capital, and internationalization speed in foreign market exit and re-entry decisions under turbulent conditions

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  • Yayla, Serdar
  • Yeniyurt, Sengun
  • Uslay, Can
  • Cavusgil, Erin

Abstract

Firms’ internationalization strategies can vary with changing environments. Occasionally, a firm may choose to re-enter a foreign market it had abandoned in the past if environmental conditions have improved. The present study provides insight into the foreign market exit and subsequent re-entry processes. Specifically, we utilize the strategic flexibility perspective to investigate the impact of market orientation, relational capital, and internationalization speed on market exit and re-entry decisions under turbulence in a host market. Using a sample of 156 Turkish firms that operated during the Arab Spring in the Egyptian market between 2010 and 2015, we find that the market-oriented firms are more flexible in their market exit decisions than less market-oriented organizations. In addition, relational capital specific to the host country has a negative impact on market exit decisions under conditions of political conflict. The results also suggest that strong ties with partners in the host country increase the propensity to re-enter the market.

Suggested Citation

  • Yayla, Serdar & Yeniyurt, Sengun & Uslay, Can & Cavusgil, Erin, 2018. "The role of market orientation, relational capital, and internationalization speed in foreign market exit and re-entry decisions under turbulent conditions," International Business Review, Elsevier, vol. 27(6), pages 1105-1115.
    • Handle: RePEc:eee:iburev:v:27:y:2018:i:6:p:1105-1115
    DOI: 10.1016/j.ibusrev.2018.04.002
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