Market Expansions through Experiential Knowledge

Abstract

Recent economic trends in the global economy motivate firms to develop and expand their export markets. Nonetheless, firms should carefully decide where to export because each economy differs in locales, opportunities, and risks. Despite the importance of the success of export market expansion, previous studies have offered few insights into how to evaluate and select new markets. Depending heavily on the knowledge-based theory of the firm and the internationalization process theory, the author attempted to develop an empirically testable model explaining that international experiential knowledge moderates the effects of country-level factors on the success of export market expansion. The model was tested using a compiled archival dataset drawn from various secondary sources regarding Korean exporters’ market expansion events. The author suggested that the success of export market expansion is affected not only by psychic distance and import country environments but also by international experiential knowledge. This manuscript is concluded with a discussion of important implications for theory and practice by emphasizing the roles of experiential knowledge and the directions of future research in addition to the limitations of the present study.