International market selection by business service firms: Key conceptual and methodological issues

Abstract

There is a research gap in our understanding of the process of internationalization and, in particular, international market selection by business service companies. The paper reviews the major determinants of international market selection including market size, geographic proximity, cultural distance, market similarity, size, government regulations, the firm's international experience, servicing home country clients, oligopolistic reaction and international locational choice. We attempt to contribute to the development of an extended conceptual framework in two ways: (i) by arguing that the nature, depth, types of modes of interaction between supplier and client will influence foreign market choice; (ii) by examining change in the organizational form of the investing company and foreign country market selection. We conclude that conceptual frameworks developed to understand internationalization by manufacturers require modification when applied to the service sector. Furthermore, more dynamic perspectives of export behaviour need to be developed which will focus not only upon market entry but also the development of foreign markets.