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The logic behind foreign market selection: Objective distance dimensions vs. strategic objectives and psychic distance

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  • Magnani, Giovanna
  • Zucchella, Antonella
  • Floriani, Dinorá Eliete

Abstract

The aim of this paper is to highlight the importance of the firm’s strategic objectives regarding the choice of countries for foreign expansion, complementing the existing literature on the internationalisation process. Through a multiple case study methodology, we conduct a comparative analysis of three Brazilian ventures that have internationalised in Italy, and three Italian firms that have internationalised in Brazil, seeking to investigate the firms’ decisions on the selection of foreign markets. We consider jointly the objective aspects of distance, the overall perceptions of the decision-makers in relation to the differences between the domestic and (potential) host countries, and the firm’s strategic objectives. This research contributes to International Business studies by revealing the role of firm-specific strategic objectives as determinants of foreign market selection, in addition to, or even on top of, the dimensions of objective distance and psychic distance.

Suggested Citation

  • Magnani, Giovanna & Zucchella, Antonella & Floriani, Dinorá Eliete, 2018. "The logic behind foreign market selection: Objective distance dimensions vs. strategic objectives and psychic distance," International Business Review, Elsevier, vol. 27(1), pages 1-20.
    • Handle: RePEc:eee:iburev:v:27:y:2018:i:1:p:1-20
    DOI: 10.1016/j.ibusrev.2017.10.009
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