Psychic Distance as a Driver in Subsequent International Market Selection: Insights from French Early Internationalizing Firms

This study explores how Early Internationalizing Firms (EIFs) international market selection evolves in subsequent internationalization. Considering the pivotal role of EIFs need to explore internationalization beyond the first market entry, this research adopts a micro-perspective to analyze why and when psychic distance can be considered a key driver in the internationalization process. Through qualitative research involving five French EIFs, findings reveal that initial international expansion is primarily driven by the entrepreneurs’ networks, a global mindset and their ability to identify global opportunities. However, as firms continue to internationalize, they increasingly consider psychic distance – encompassing cultural, administrative, and geographic differences – when selecting new markets. Over time, the psychic distance drives them to favor less uncertain markets. This study contributes to understanding EIFs’ dynamic internationalization by emphasizing the role of entrepreneurial learning and experience in shaping market selection strategies, ultimately influencing the firms’ long-term global trajectory.