In furthering our understanding of the dynamics of the internationalization of firms, process models have played a significant role [Bilkey and Tesar 1977; Cavusgil 1980, 1984; Czinkota 1982; Johanson and Vahlne 1977, 1990; Luostarinen 1980; Reid 1983]. In these models, market-specific experiential knowledge is central in explaining the firm’s internationalization process. A vast amount of research, using the concept of experiential knowledge, on the internationalization process and the choice of mode for entering foreign markets has been accumulated [Barkema, Bell and Pennings 1996; Beamish 1990; Calof and Beamish 1995; Erramilli 1990, 1991; Erramilli and Rao 1990, 1993; Hirsch 1993; Kogut and Singh 1988; O’Grady and Lane 1996; Reid 1984; Root 1987; Sharma and Johanson 1987; Wiedersheim-Paul, Olson and Welch 1978]. Surprisingly, none of the above-mentioned work has explicitly dealt with the cost of the internationalization process. This is surprising since the management of internationalization unavoidably gives rise to the question of cost [Carlson 1974]. An internationalization process entails risk and the investment of resources. Here the issue of the effects of the critical experiential knowledge on the cost of the internationalization process becomes important. Cost aspects have a bearing on the profit generated by firms [Bilkey 1982], on a firm’s inclination to enter foreign markets [Dichtl, Koeglmayr and Mueller 1990], and on the selection or changing of foreign market entry mode [Calof and Beamish 1995].

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Experiential knowledge and cost in the internationalization process

Why are some small and medium-sized enterprises (SMEs) more successful in selling outside their domestic markets than are other SMEs in the same industry? Although the traditional explanation is that firms can gain valuable knowledge and resources as they become older and larger, small and young firms are not necessarily disadvantaged if they develop other mechanisms to acquire the requisite knowledge and resources. We examine the role of the management team's international experience as such a mechanism, for the internationalization of Canadian software product firms. We show that internationally experienced management teams have a greater propensity to develop foreign strategic partners and to delay less in obtaining foreign sales after start-up, and that these behaviors are associated with a higher degree of internationalization.

https://link.springer.com/content/pdf/10.1057%2Fpalgrave.jibs.8490120.pdf

The Influence of the Management Team's International Experience on the Internationalization Behaviors of SMES

Despite widespread research on the export behavior of firms, no integrative review of the empirical work in relation to export development models exists in the extant literature. This article reviews the main models on the subject, identifies their structural characteristics, evaluates the methodologies used for their validation, and analyzes the key conceptual issues emerging from their assessment. While valuable inroads into the mechanics and constituent parts of the export development process have been made, this avenue of empirical inquiry has attracted criticism on structural, methodological and conceptual grounds. Future research in the field should harness the eclectic contribution afforded by existing theory and, at the same time, enhance its status with contributions from marketing, business and other disciplines.

The Export Development Process: An Integrative Review of Empirical Models

This paper examines the varied empirical findings of the relationship between firm, individual characteristics, and foreign entry expansion behavior. The results support the view that such activity is neither exclusively determined by structural or managerial factors and is really the result of interaction between both types of variables. The paper proposes that foreign entry and expansion can best be understood as an adoption of innovation-type behavior.

/pdf/the-decision-maker-and-export-entry-and-expansion-3otmcanrgg.pdf

The decision-maker and export entry and expansion

In this article we develop a model that stresses the importance of a firm's activities and “pre-export” behavior for the export start. Of special importance in the model are factors such as information, characteristics of the decision-maker, the enterprise environment, and the extraregional expansion of the firm. The model is based both on more “traditional” research in international business and recent developments in location theory.

https://link.springer.com/content/pdf/10.1057%2Fpalgrave.jibs.8490650.pdf

Pre-Export Activity: The First step in Internationalization

This study profiles export decision-makers in both exporting and nonexporting firms, in terms of their perceptions of the risks and cost/benefit trade-offs associated with exporting, and their reactions to various types of stimuli to export. It concludes an export stimulus (e.g., an unsolicited order from a foreign customer) is a significant but not sufficient condition for a positive export decision, and that important variations between exporters and nonexporters in cost, profit, and risk perceptions may well account for different responses to similar stimuli by these two groups. Present public policies to promote exports are critiqued in light of the findings.

/pdf/the-export-decision-process-an-empirical-inquiry-chgkxt11jn.pdf

The Export Decision Process: An Empirical Inquiry

International business: Theory and managerial applications

ler Board, 1980 may one day be regarded as the year of the first significant symbolic step toward the democratization of corporate governance in the United States. In a provocative conclusion on the prospects for industrial democracy, King and van de Vall argue cogently that underlying social and economic conditions favor its development. They point out, as have others, that economic crisis has often triggered demands for wider worker participation; that the changing demographics of the work force-younger, more highly educated workers-also suggest it; and that the search for meaning and self-actualization in work-a persistent theme in the West-is increasing worker involvement on the job. Finally, they observe, the extension of democracy from political to economic institutions eems to be an almost natural and logical development of the democratic idea. While obviously sympathetic to the underlying idea of industrial democracy, the authors take a nonsectarian, nonideological approach to their topic. Although the subject lends itself to polemics, the authors remain detached in their discussion of three contemporary models of industrial democracy: joint consultation in England, workers' management in Yugoslavia, and codetermination in the West German coal and steel industries. The authors briefly discuss the historical origins of each system, and then move to a systematic presentation of the formal organization and structure of each model. The book begins with a brief (perhaps too superficial) sketch of the 19th and early 20th century intellectual antecedents of industrial democracy-utopian socialism, Marxism, Fabian socialism, and Guild socialism. Then the authors move to an analysis and comparison of the three models they have chosen. The presentation of each model is thorough and well organized, but there is a somewhat dated quality to the discussion. Although the book was published in 1978, the authors were apparently unable to incorporate into their discussion significant changes that occurred in each of these countries in the mid-1970s: the re-invigoration of the British debate on industrial democracy with the TUC resolution to put union members on company boards and the controversial Bullock Report that recommended a move toward the codetermination model; constitutional changes in Yugoslav workers' management in 1976; and an expanded codetermination law in West Germany in 1976. Moreover, some of the sources used in the book are aging quickly. Any book written about a fast-moving subject, however, is bound to be a bit out of date by the time it appears. One might also quibble with the authors' choice of models for analysis, especially joint consultation, which is, after all, toothless and moribund and about which much has already been written. Whatever it may be, joint consultation is not on the frontier of experiments in industrial democracy, and the authors basically recognize this. Much more interesting, it seems to me, are recent innovations in workers' management and ownership in Scandinavia. In the United States and England, proposals for union involvement in management have always raised the cry that in an adversarial industrial relations system, trade union participation in management creates an inevitable conflict of interest. In that respect, the wide-ranging ownership and management activities of the Israeli Histadrut is a fascinating and too-little-understood experiment and one that deserves wider attention. After analyzing the three models of industrial democracy, the authors devote much of the remainder of the book to comparing (ranking and assessing) them in terms of \"theoretically derived variables,\" which take the form of elaborate conceptual typologies. The authors discuss trends and problems common to all three systems (such as overcoming worker apathy and maintaining channels of communication) and, as has been done elsewhere, construct typologies by which the scope and extent of workers' power can be measured. King and van de Vall generally share the view held by some (Hugh Clegg and Milton Derber, for example) that collective bargaining per se is a form of industrial democracy. More radical exponents of industrial democracy say that equating collective bargaining with industrial democracy serves basically as a conservative ploy to defend the industrial relations status quo. \"You want industrial democracy? You've got it,\" they seem to say, like the Wizard of Oz who tells his travel-weary supplicants that they already have what they have come looking for. Despite some shortcomings, King and van de Vall's volume provides a good introduction to some of the major forms and issues in the dynamic field of industrial democracy. Paul Blumberg Professor Department of Sociology Queens College New York

Multinational collective bargaining attempts : the record, the cases, and the prospects

This study focuses on the management/labor interface within the context of the foreign direct investor in the United States, eespecially the Japanese. Utilizing case studies and interviews, the author examines both the effects of Japanese multinationals on U.S. workers' interests, and the effects of the U.S. work environment on Japanese multinationals. Three basic questions permeated the research: How do labor and management considerations come together as key strategic and operating decisions are made and implemented by Japanese multinationals in the United States? How do Japanese experiences compare to the experiences of other foreign-owned and domestic firms? What do these experiences portend regarding U.S. labor's interests in jobs, income, unionization, etc., Japanese firms' interests in being able to compete successfully in the U.S. market, and the U.S. national interest in promoting employment, expanding incomes, competitive markets, and so forth? Findings in both regards are compared to similar effects at other foreign, non-Japanese multinationals and at U.S.-owned firms in similar industries.

Japanese Multinationals in the United States: Case Studies

With the acceleration of foreign direct investments (FDI) in the U.S. in the form of foreign branches, affiliates, and wholly owned subsidiaries, there has been a steady influx of FDI-based products in the U.S. market. This study assesses the attitudes of American consumers toward FDI and FDI-based products in the U.S. market. Traditionally ethnocentric models have been used to assess the country-of-origin effect (COE) on consumer evaluation of imports. We extend this ethnocentric methodology to capture American consumer attitudes toward FDI and FDI-based product offerings. After briefly outlining a scale to measure such attitudes, this paper discusses American consumer attitudes specifically in relation to Japanese direct investments (JDI) and JDIbased products in the U.S. Multinational business strategy implications of the findings are discussed. Introduction As contrasted to foreign direct investment (FDI) abroad by U.S. investors, FDI of foreign investors into the U.S. is called reverse foreign direct investment (RFDI). RFDI has expanded rapidly in recent years, accompanied by an increasing number of foreign owned companies, branches, affiliates and subsidiaries, technology transfers and strategic alliances. RFDI generates several product offerings in the U.S. market whose content is partly domestic and partly foreign. How does a typical American consumer perceive FDI and FDI-based products in the U.S. Markets? This is the question investigated in this study. Because of the large inflow of Japanese direct investments (JDI) and Japanese owned companies (JOCs) in the U.S., this study focuses on RFDI with respect to JDIs and JOCs, and specifically in three U.S. states, California, Michigan and Tennessee, each of which has a major presence of JDI and JOCs in recent years. The refocused question now is: how do American consumers perceive JDI in general, and JDI-JOC-based products in the U.S. markets? The Relevance and Importance of this Study The share of U.S. assets, employment and production accounted for by U.S. subsidiaries of foreign firms has more than tripled since 1980, especially in the non-service sectors (Grosse and Trevino 1996). As of 1992, the U.S.A. had 10,747 foreign affiliates with total assets of $1.8 trillion and employing about 4.7 million Americans. Of these, 3,954 (36.8 percent) affiliates were in the finance, insurance, and real estate sectors with a total investment of $835 billion (46.1 percent) and employing 245,500. About 2,560 (23.8 percent) affiliates were in the manufacturing sector with assets $473 billion (26.1 percent) and employing 2,231,700 (Survey of Current Business, August 1996). In general, as opposed to portfolio investment, FDI is supposed to measure the extent to which foreign firms and individuals control U.S. production and services (Graham and Krugman 1995). It is unclear what share of ownership brings with it actual control. However, for practical purposes, the U.S. Department of Commerce defines FDI as direct investment when a single investor (individual or institution) has acquired a stake of 10 percent or more in a U.S. firm. That firm is then considered a domestic affiliate of the foreign investor (Survey of Current Business, August 1995). Japan is a major investor in the U.S. Concerned with possible protectionism in America, Japan's recent and consistent strategy has been to switch to FDI, especially in the form of wholly owned corporations (Chernotsky 1987; Gastner 1992). Between 1977 and 1984, Japanese direct investment (JDI) in the U.S. grew at an annual rate of over 38 percent, the highest among foreign countries (Survey of Current Business, June 1993). Among the top ten developed countries that have consistently dominated FDI activity in the U.S. and accounted for over 90 percent of all foreign firms in the U.S., Japan has jumped from the 8th rank (48 firms) in 1974 to the sixth rank (203 firms) in 1978 to the 4th rank (394 firms) in 1984 to the first rank (2472 firms) in 1992 (Arpan and Ricks 1986; JETRO 1996). …

Duane Kujawa

Papers

The Export Decision Process: An Empirical Inquiry

International business: Theory and managerial applications

Multinational collective bargaining attempts : the record, the cases, and the prospects

Japanese Multinationals in the United States: Case Studies

American Consumer Attitude toward Foreign Direct Investments and Their Products