Firms’ internationalization and alternative approaches to the international customer/market selection

Abstract

While the theoretical development and empirical studies on exchange transaction modality to international markets have been impressing, relatively few researchers have focused on the process by which firms select where or with whom the transactions should be performed. This paper is an attempt to establish a research agenda on the selection of foreign market or customer. The characteristics of the ‘traditional’ approaches—systematic and non-systematic—are examined and compared with a relationship approach. Furthermore, this paper emphasizes the interrelationship between the choice of entry mode and choice of foreign market/customer. The authors develop research propositions suggesting circumstances under which a relationship approach is more likely than a traditional approach. Future research directions are illuminated.