Paper info: Industrial Network Membership: Reducing Psychic Distance Hazards in the Internationalization of the Firm
Title
Industrial Network Membership: Reducing Psychic Distance Hazards in the Internationalization of the Firm
Authors
João Santos, Manuel Ferreira, Nuno Reis and Sandra Alves
Place of Publication
The paper was published at the 27th IMP-conference in Glasgow, Scotland in 2011.
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Abstract
ABSTRACT
The network approach to internationalization of firms has warranted the research focus of many international business scholars. Firms are increasingly involved in international business endeavors and arguably need to learn to adapt to idiosyncratic milieus they encounter in the foreign markets. This paper proposes a conceptual model suggesting that membership in industrial networks strengthens corporate competitiveness in international markets. Network membership provides access to market-related knowledge and a wider array of physical, technical, financial and other tangible resources, and social and reputational endorsement provided by the networks that facilitates adaptation to the various dimensions - economic, political, legal, and cultural – of the international business environments. Membership in social and business networks is likely to improve performance in foreign markets by easing internationalization and reducing firms‟ perceived psychic distance.
Keywords: Networks, internationalization theories, psychic distance.
The network approach to internationalization of firms has warranted the research focus of many international business scholars. Firms are increasingly involved in international business endeavors and arguably need to learn to adapt to idiosyncratic milieus they encounter in the foreign markets. This paper proposes a conceptual model suggesting that membership in industrial networks strengthens corporate competitiveness in international markets. Network membership provides access to market-related knowledge and a wider array of physical, technical, financial and other tangible resources, and social and reputational endorsement provided by the networks that facilitates adaptation to the various dimensions - economic, political, legal, and cultural – of the international business environments. Membership in social and business networks is likely to improve performance in foreign markets by easing internationalization and reducing firms‟ perceived psychic distance.
Keywords: Networks, internationalization theories, psychic distance.