Perceptual measures are particularly useful in the

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Unformatted text preview: . Perceptual measures are particularly useful in the measurement of internalization advantages since past experience has shown that it is a difficult construct to quantify. Unlike location advantages, CHOICE OF FOREIGN MARKET ENTRY MODE 3 indicators of internalization advantages have not been appropriately identified in the entry mode literature to date.3 Managerial perceptions are also relevant for the assessment of the location advantages of a specific country. While previous research has assumed that the location advantages are exogenous4 and hence constant across firms for a given host country, our study allows us to measure these variables as a function of the perceptions of managers. It should be noted that these perceptions may be different due to variations in managers’ past experiences in that country (and other countries), level of knowledge about that country, individual biases, etc. Thereis wide support from the organizational behavior literature for the importance of managerial perceptions in decisionmaking [Cyert and March 19633...
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