The role of market orientation, relational capital, and internationalization speed in foreign market exit and re-entry decisions under turbulent conditions

Serdar Yayla, Sengun Yeniyurt, Can Uslay and Erin Cavusgil

International Business Review, 2018, vol. 27, issue 6, 1105-1115

Abstract: Firms’ internationalization strategies can vary with changing environments. Occasionally, a firm may choose to re-enter a foreign market it had abandoned in the past if environmental conditions have improved. The present study provides insight into the foreign market exit and subsequent re-entry processes. Specifically, we utilize the strategic flexibility perspective to investigate the impact of market orientation, relational capital, and internationalization speed on market exit and re-entry decisions under turbulence in a host market. Using a sample of 156 Turkish firms that operated during the Arab Spring in the Egyptian market between 2010 and 2015, we find that the market-oriented firms are more flexible in their market exit decisions than less market-oriented organizations. In addition, relational capital specific to the host country has a negative impact on market exit decisions under conditions of political conflict. The results also suggest that strong ties with partners in the host country increase the propensity to re-enter the market.

Keywords: Market exit; Market re-entry; Market turbulence; Market orientation; Relational capital; Internationalization speed (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:27:y:2018:i:6:p:1105-1115

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DOI: 10.1016/j.ibusrev.2018.04.002

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