Experiential Knowledge and Cost in the Internationalization Process

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;…