From bruhno and shilts 2001 theory we have chosen to

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Unformatted text preview: ry. As a complement to Root’s (1994) model of external factors influencing the entry mode decision Root (1994) highlights the Geographic distance as an additional important external factor, which we will investigate together with the contribution made by Bell (1995) that firms initially target neighboring countries and subsequently enters foreign markets with greater “physic distance”. 21 LITERATURE REVIEW Regarding Hollensen’s (2001) statement of the importance in Available number of export intermediaries will be disregarded, as it is not relevant to the thesis purpose. From Bruhno and Shilt’s (2001) theory we have chosen to focus on the external factor of Competitors, as the market factor is already more extensively covered in previously mentioned theory. Finally Root’s (1994) summarization of the external factors shown in table 2.1 will be used as a complement to the external factors previously mentioned since it has a clear connection between the external factors and the actual choice of market entry mode and these are: External Factors (Foreign Country): • • • • • • • • • • • • • • • • • • Great geographical distance Dynamic economy Stagnant economy Exchange rate depreciation Exchange rate appreciation Small cultural distance Great c...
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