Import-based market experience and firms’ exit from export markets

Eliane Choquette ()
Additional contact information
Eliane Choquette: Aarhus University

Journal of International Business Studies, 2019, vol. 50, issue 3, No 6, 423-449

Abstract: Abstract Empirical evidence shows that firms’ internationalization process can be non-linear and often includes de-internationalization events. This study focuses on one type of de-internationalization event – a firm’s decision to exit an export market – and asks how international experience affects its probability of occurrence. In particular, this study complements existing literature by looking at the effect of import-based market experience – considered as a source of market-specific knowledge prior to export market entry – on the probability of a firm exiting an export market. Conceptually, this study contrasts two views on the consequences of increased market knowledge and hypothesizes that, from a learning perspective, import-based market experience ought to reduce export market exit, whereas, from a sunk cost logic, it ought to increase export market exit. Using duration analysis of detailed data on the internationalization history of 1920 Danish firms, I find that the sunk cost logic primarily explains the relationship between import-based market experience and a firm’s probability to exit an export market, and that the effect is strongest for exports to similar destinations. Further analysis shows that this result is partly driven by experimentation-like export behavior by firms with import-based market experience.

Keywords: experiential knowledge; learning; sunk costs; export market exit; duration models; experimentation (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1057/s41267-018-0193-1 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jintbs:v:50:y:2019:i:3:d:10.1057_s41267-018-0193-1

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

DOI: 10.1057/s41267-018-0193-1

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().