Market similarity and market selection: Implications for international marketing strategy

Wholly Owned Subsidiary Versus Technology Licensing in the Worldwide Chemical Industry

“…Contractor and Kundu (1998) found that equity-based modes were preferred by companies with considerable experience and existing geographic reach. Similarly, Davidson (1983), Franko (1989), Gatignon and Anderson (1988) observed an increasing propensity to select wholly owned subsidiaries as experiential knowledge increased. However, Benito and Gripsrud (1992) rejected the hypothesis that current levels of direct investment in culturally remote countries increased with previous levels of foreign direct investment.…”

“…First, that firms move to distant countries only after having established a presence in more proximate countries. Indeed, the firm's experiential knowledge derived from the domestic market is of limited value in markets located at a great psychic distance (Davidson, 1983;Kogut and Singh, 1988). Therefore, the psychic distance between the home and foreign markets affects market selection as well as the choice of the entry mode.…”

Domestic Activity and Knowledge Development in the Internationalization Process of Firms

“…The effect of domestic operations is, however, not analysed. In his study of US firms, Davidson (1980Davidson ( , 1983 does not explicitly analyse the effects of domestic market operations.…”

“…Thereafter, resource commitment abroad is increased and firms establish sales subsidiaries abroad. Finally, foreign production starts (Davidson, 1980(Davidson, , 1983Ball & Tschoegl, 1982;Calof & Beamish, 1995;Gatignon & Anderson, 1988;Johanson & Wiedersheim-Paul, 1975;Kogut & Singh, 1988;Weinstein, 1977).…”

Working Abroad, Working with Others: How Firms Learn to Operate International Joint Ventures

“…Experiential learning from previous entries is the driving force behind new investments (Barkema, Bell. & Pennings, 1996;Davidson, 1983;Denis & Depelteau, 1985;Johanson & Wiedersheim-Paul, 1975;Luostarinen, 1980). The internationalization process approach focuses, however, on the early steps in the internationalization process, ignoring the investment mode chosen (Kogut & Singh, 1988).…”