Does distance matter for internationally-oriented small firms?

Brock, Jürgen Kai‐Uwe; Johnson, Jeffrey E.; Zhou, Josephine Yu

doi:10.1016/j.indmarman.2010.08.007

Cited by 31 publications

(34 citation statements)

References 47 publications

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“…It should also be noted that Malhotra et al (2009) and Ellis (2008) studied different foreign entry modes, and that this might explain some of the differences in their findings. A recent study by Brock et al (2011) on the internationalization of small firms is consistent with Ellis (2008), in that it revealed that in foreign market entry psychic distance tends to negate the attractiveness of market size.…”

Section: Distance Dimensions and Foreign Market Sizementioning

confidence: 55%

“…Recent improvements in transportation systems and communication technologies, including the Internet, have not eliminated the influence of geographic distance on trade intensity between countries (Dow, 2000;Dow and Karunaratna, 2006;Ghemawat, 2001;Gooris and Peeters, 2014;Leamer and Storper, 2001) or its impact for small and new ventures (Brock et al, 2011;Dow, 2000). Geographic distance even impacts on the trade of digital goods sold over the Internet (Blum and Goldfarb, 2006), affecting the market selection of small software firms that trade completely intangible products Tyrväinen, 2007, 2008).…”

Section: Geographic Distancementioning

confidence: 99%

“…In attempts to apply the Kogut and Singh index to Hofstede's cultural dimensions, cultural distance has not proved to be a strong indicator for the internationalization of small and new ventures (Brock et al, 2011;Dow, 2000;Tyrväinen, 2007, 2008).…”

Section: Cultural Distancementioning

confidence: 99%

See 2 more Smart Citations

Geographic, cultural, and psychic distance to foreign markets in the context of small and new ventures

Ojala

2015

International Business Review

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Section: Distance Dimensions and Foreign Market Sizementioning

confidence: 55%

Section: Geographic Distancementioning

confidence: 99%

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Geographic, cultural, and psychic distance to foreign markets in the context of small and new ventures

Ojala

2015

International Business Review

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“…Our research links a systematic approach (TCA) with an unsystematic one (cultural distance) in clarifying the puzzling mechanism between cultural distance and IMS (Tihanyi et al, 2005), thus, enhances the role of cultural distance in internationalization (Brock et al, 2011).…”

Section: Research Implicationsmentioning

confidence: 99%

International market selection and export performance: a transaction cost analysis

Lin

Wei

2016

EJM

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Abstract:Purpose -Exporting firms are concerned with which foreign country to select and the performance consequences of this international market selection (IMS) decision. On the basis of transaction cost analysis (TCA), this paper proposes a conceptual framework that hypothesizes the relationship between transaction cost factors, IMS and export performance.Design/methodology/approach -We test the proposed framework with a database of Chinese manufacturing firms using regression models and controlling for possible endogeneity. The endogeneity issue may arise due to IMS being influenced by unobserved industrial/firm attributes.Findings -The results show that transaction cost factors are able to explain IMS. Furthermore, firms whose decisions have incorporated transaction cost factors perform significantly better than their rivals.Research limitations/implications -Understanding transaction costs helps decisionmakers formulate more efficient IMS strategy to achieve superior export performance. Future research on IMS may examine 'passive exporting', i.e. exporting initiated by overseas buyers, consider the role of institutional distance and use other approaches towards cultural distance-based IMS.Originality/value -This study adds a new theoretical underpinning for IMS by developing a framework based on TCA, thus broadens the applications of TCA into IMS. Our empirical results support this extension.

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“…Distance matters in international business (Ghemawat, 2001;Eden and Miller, 2004;Brock et al, 2011). Distance-associated dissimilarities between home and host countries often require firms to put more e↵ort into assuring proper information flow in decision-making during internationalization.…”

Section: Proxy Of Perceived Riskmentioning

confidence: 99%

Contextualization of Evolving Patterns in the Internationalization of Small Firms

2015

Linköping Studies in Science and Technology. Dissertations

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The internationalization of SMEs has been recognized as one of the important paths to growth in SMEs. However, internationalization is also a resource and competence-demanding process. This is especially true for smaller-sized SMEs – the small and micro-sized firms – which have a large resource constraint, making internationalization even more challenging. Although this group of small firms counts for an average of over 98% of the total population of enterprises in EU countries, extant research on the internationalization of this group is still limited. Therefore, the main purpose of this dissertation is to contribute to a better understanding of evolving patterns of internationalization in the smaller-sized SMEs. The study uses emerging market entry along the internationalization of small firms as a context to probe the dynamics of perceived risk (uncertainty) and perceived opportunity in different foreign markets which influence the important decisions of small firms during their internationalization. The main study takes a longitudinal approach and uses mixed methods to investigate the features in both the initial period and the continued period of internationalization. It mainly builds on a multiple-case study of 12 Swedish firms, which have/had emerging market entry experience and/or involvement. This study illustrates influences from the environmental, organizational and individual levels on evolving patterns of internationalization in the investigated firms. This dissertation concludes that critical decisions and actions taken in the internationalization process depend on interactions among the influence and resources from the three levels. Such interactions form a conditional preference on perceived risk (uncertainty) and perceived opportunity during the internationalization of small firms. The study further proposes that the dynamics in the internationalization process are caused by a prospect-guided change mechanism. This dissertation contributes to the literature by: differentiating patterns of internationalization; enriching the study of “born global” in the continued period of internationalization; introducing a new perspective on the interpretation of dynamics in the internationalization; and increasing the understanding on the interactions of resources from three levels on the internationalization of small firms

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Does distance matter for internationally-oriented small firms?

Cited by 31 publications

References 47 publications

Geographic, cultural, and psychic distance to foreign markets in the context of small and new ventures

Geographic, cultural, and psychic distance to foreign markets in the context of small and new ventures

International market selection and export performance: a transaction cost analysis

Contextualization of Evolving Patterns in the Internationalization of Small Firms

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