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Unformatted text preview: h markets
establishing local presence might be more suitable for the company. 2.2.3 Theory by Bell (1995)
Bell (1995) contributes to the previous theory by stating that firms initially target neighboring
countries and subsequently enters foreign markets with successively greater “psychic
distance” in terms of cultural, economic and political differences and also in relation to their
Bell (1995) found that “psychic distance” is a key factor in the selection of export markets.
The research showed that there is an overall pattern that indicates that 50 – 70 per cent of
firms entered “close” markets in the initial stages of export development. Thus, for example,
Finnish firms’ targeted Sweden, Norway and the former USSR – countries that are
geographically and culturally proximate with Finland, especially, in the case of the latter, has
very strong historic ties. Similarly Norwegian firms selected Sweden, the UK, or Finland. The
author also found that some 30 – 50 per cent of firms had initiated e...
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- Summer '14
- The Land