Psychic Distance as a Driver in Subsequent International Market Selection: Insights from French Early Internationalizing Firms

Diana A. Filipescu (), Juliane Engsig (), Angélique Breuillot () and Josefina Palacios Fernández ()
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Diana A. Filipescu: TBS Business School, Department of Strategy, Entrepreneurship and Innovation
Juliane Engsig: TBS Business School, Department of Strategy, Entrepreneurship and Innovation
Angélique Breuillot: ESSCA School of Management, Department of Strategy, Entrepreneurship and International Business
Josefina Palacios Fernández: TBS Business School, Department of Strategy, Entrepreneurship and Innovation

Management International Review, 2025, vol. 65, issue 6, No 2, 1015-1038

Abstract: Abstract This study explores how Early Internationalizing Firms (EIFs) international market selection evolves in subsequent internationalization. Considering the pivotal role of EIFs need to explore internationalization beyond the first market entry, this research adopts a micro-perspective to analyze why and when psychic distance can be considered a key driver in the internationalization process. Through qualitative research involving five French EIFs, findings reveal that initial international expansion is primarily driven by the entrepreneurs’ networks, a global mindset and their ability to identify global opportunities. However, as firms continue to internationalize, they increasingly consider psychic distance – encompassing cultural, administrative, and geographic differences – when selecting new markets. Over time, the psychic distance drives them to favor less uncertain markets. This study contributes to understanding EIFs’ dynamic internationalization by emphasizing the role of entrepreneurial learning and experience in shaping market selection strategies, ultimately influencing the firms’ long-term global trajectory.

Keywords: Early internationalizing firms; International entrepreneurship; International market selection; Psychic distance; French SMEs (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11575-025-00599-z

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