Industrial network membership: reducing psychic distance hazards in the internationalization of the firm

Santos, João Carvalho; Ferreira, Manuel Portugal; Reis, Nuno; Serra, Fernando

http://hdl.handle.net/10400.8/390

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Authors

Santos, João Carvalho

Ferreira, Manuel Portugal

Reis, Nuno

Serra, Fernando

Abstract(s)

The network approach to internationalization of the firms has warranted the research focus of many international business scholars. Firms are increasingly involved in international business endeavors and arguably need to learn to adapt to idiosyncratic milieus they encounter in the foreign markets. This paper proposes a conceptual model suggesting that integration in networks strengthens corporate competitiveness in international markets. Network membership provides access to knowledge that facilitates adaptation to the various dimensions - economic, political, legal, cultural – of the international business environments. Membership in social and business networks are likely to ease internationalization by reducing firms’ perceived psychic distance.