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The Internet And Foreign Market Expansion By Firms

Author

Listed:
  • Petersen, Bent

    (Department of International Economics and Management, Copenhagen Business School)

  • Welch, Lawrence S.

    (Mt. Eliza Business School)

  • Liesch, Peter

    (University of Queensland)

Abstract

The Internet has the potential to improve the efficiency of market transactions. By use of the Internet companies can reduce their search costs significantly and increase their ability to respond flexible to new market opportunities as a result of reduced sunk costs. On the basis of internationalization theory and agency/transaction cost theory the paper examines the effects of the Internet on foreign market expansion by firms. These theoretical issues and possible effects on internationalization are illustrated through the presentation of three general predictions regarding possible outcomes. The predictions demonstrate that a range of foreign expansion effects of the Internet is likely: from limited impact to rapid, widespread global expansion in many cases. The Internet may contain a challenge to mainstream internationalization theory in regard to the role of knowledge: instead of acting as an initial constraint it may be a factor that propels firms into foreign market expansion.

Suggested Citation

  • Petersen, Bent & Welch, Lawrence S. & Liesch, Peter, 2002. "The Internet And Foreign Market Expansion By Firms," Working Papers 7-2002, Copenhagen Business School, Department of International Economics and Management.
  • Handle: RePEc:hhb:cbsint:2002-007
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    File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/6565
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    References listed on IDEAS

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    8. Reid, Stan, 1984. "Information acquisition and export entry decisions in small firms," Journal of Business Research, Elsevier, vol. 12(2), pages 141-157, June.
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    Citations

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    Cited by:

    1. Charmaine Glavas & Shane Mathews & Constanza Bianchi, 2017. "International opportunity recognition as a critical component for leveraging Internet capabilities and international market performance
      [Reconocimiento de oportunidad internacional como un componen
      ," Journal of International Entrepreneurship, Springer, vol. 15(1), pages 1-35, March.
    2. Francesca Checchinato & Giulia Zanichelli, 2016. "An analysis of factors influencing the online presence in distant countries: the case of italian fashion brands in china," MERCATI E COMPETITIVITÀ, FrancoAngeli Editore, vol. 2016(3), pages 45-67.
    3. Robert Wentrup, 2016. "The online–offline balance: internationalization for Swedish online service providers," Journal of International Entrepreneurship, Springer, vol. 14(4), pages 562-594, December.
    4. Pezderka, Noemi & Sinkovics, Rudolf R., 2011. "A conceptualization of e-risk perceptions and implications for small firm active online internationalization," International Business Review, Elsevier, vol. 20(4), pages 409-422, August.
    5. Petersen, Bent & Welch, Lawrence S., 2002. "International Business Development And The Internet, Post-Hype," Working Papers 8-2002, Copenhagen Business School, Department of International Economics and Management.
    6. Serrano, Raúl & Acero, Isabel, 2015. "Rethinking Entry Mode Choice of Agro-Exporters: The Effect of the Internet," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 18(3).
    7. Reuber, A. Rebecca & Fischer, Eileen, 2011. "International entrepreneurship in internet-enabled markets," Journal of Business Venturing, Elsevier, vol. 26(6), pages 660-679.
    8. Glavas, Charmaine & Mathews, Shane, 2014. "How international entrepreneurship characteristics influence Internet capabilities for the international business processes of the firm," International Business Review, Elsevier, vol. 23(1), pages 228-245.
    9. Deng, Ziliang & Wang, Zeyu, 2016. "Early-mover advantages at cross-border business-to-business e-commerce portals," Journal of Business Research, Elsevier, vol. 69(12), pages 6002-6011.
    10. Yamin, Mohammad & Sinkovics, Rudolf R., 2006. "Online internationalisation, psychic distance reduction and the virtuality trap," International Business Review, Elsevier, vol. 15(4), pages 339-360, August.
    11. Mathews, Shane & Bianchi, Constanza & Perks, Keith J. & Healy, Marilyn & Wickramasekera, Rumintha, 2016. "Internet marketing capabilities and international market growth," International Business Review, Elsevier, vol. 25(4), pages 820-830.
    12. Tran, Yen & Yonatany, Moshe & Mahnke, Volker, 2016. "Crowdsourced translation for rapid internationalization in cyberspace: A learning perspective," International Business Review, Elsevier, vol. 25(2), pages 484-494.
    13. Loane, S. & Bell, J.D. & McNaughton, R., 2007. "A cross-national study on the impact of management teams on the rapid internationalization of small firms," Journal of World Business, Elsevier, vol. 42(4), pages 489-504, December.
    14. Bianchi, Constanza & Mathews, Shane, 2016. "Internet marketing and export market growth in Chile," Journal of Business Research, Elsevier, vol. 69(2), pages 426-434.

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    Keywords

    Internet; Market transactions; Internationalization; market expansions;

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