Organizational Learning in Foreign Markets

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Organizational Learning in Foreign Markets

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dc.contributor.author Pedersen, Torben en_US
dc.contributor.author Petersen, Bent en_US
dc.date.accessioned 2009-02-04T10:25:26Z
dc.date.available 2009-02-04T10:25:26Z
dc.date.issued 2004-03-18T00:00:00Z en_US
dc.identifier.uri http://hdl.handle.net/10398/6904
dc.description.abstract This empirical study addresses the question of how foreign market unfamiliarity of entrant firms develops post-entry. Three different predictions of post-entry change of foreign market unfamiliarity are derived from the literature on firms’ internationalization process. The predictions are made subject to empirical examination using a set of primary data of current (i.e. at the point in time of mail interviews) foreign operation business operations reported by managers of Danish international firms. The empirical study gives insight to the incidence and character of the so-called ‘shock effect’ in relation to foreign market entry: the phenomenon of entrant firms’ inclination to underestimate differences between the home and host country in terms of the business environment. The data support the supposition that entrant firms in general are exposed to a ‘shock effect’. On average, the foreign market unfamiliarity as perceived by the entrant firms peaks seven years after entry. The company data indicate that entrant firms in general experience the shock effect in relation to entry of adjacent, rather than distant, countries. Hence, the ‘psychic distance paradox’ hypothesis is supported. Also, the data suggest that the shock effect befalls producers of customized products, but not producers of standardized products, and furthermore, entrant firms in general experience the shock effect in relation to acquisition of tacit rather than explicit knowledge. Key words: Internationalization process of firms, liability of foreignness, learning, shock effect. en_US
dc.language eng en_US
dc.relation.ispartofseries LINK Working paper;2002-17 en_US
dc.subject.other kep en_US
dc.title Organizational Learning in Foreign Markets en_US
dc.type wp en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Institut for Industriøkonomi og Virksomhedsstrategi
dc.contributor.departmentshort IVS
dc.contributor.departmentuk Department of Industrial Economics & Strategy
dc.contributor.departmentukshort IES
dc.idnumber x656406207 en_US
dc.publisher.city København en_US
dc.publisher.year 2002 en_US
dc.title.subtitle Feeling Its Way in an Unfamiliar Environment en_US


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