Mutual commitment and experiential knowledge in international business relationships

Numerous studies have identified various patterns of behaviour by firms developing international business relationships, but little attention has been devoted to empirical studies of the dynamic processes within these international business relationships. This paper contributes towards a better understanding of how market knowledge and market commitment are developed in supplier/customer relationships in international markets. It reports the empirical testing of a dynamic model of increasing commitment and experiential knowledge development in international business relationships. The model shows that the dynamics of experiential knowledge generation seem to take place mainly in the mutual relationship development, not so much within the individual firms that develop the relationship. The dynamics of the model are that a domestic supplier replaces his business relationships with existing customers for other business relationships with customers that are more embedded in the foreign market. This process shows how the supplier’s increased knowledge of the business network that a foreign customer is embedded in makes it possible for the supplier to overstep the customer and deal with firms that are more embedded in the local market. The model thus explicates a process of increasing foreign market involvement.