The research showed that there is an overall pattern

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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 geographical proximity. 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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