Entry into new foreign markets: Performance feedback and opportunity costs

Ohad Ref, Naomi E. Feldman, Dinesh N. Iyer, Zur Shapira

Research output: Contribution to journalArticlepeer-review

Abstract

To resolve the mixed and sometimes contradictory results regarding the effect of performance feedback on the tendency and timing to expand abroad, we develop a theoretical framework that takes opportunity costs into account. Our findings show a non-linear relationship, mostly an inverted U-shape, between performance both below and above aspiration and entering new foreign markets. Our results also show that industry growth rate moderates this non-linear relationship differently for firms near aspiration (below or above) compared with firms well below or well above aspiration, furthering our understanding of contextual factors and the boundaries of performance feedback theory regarding international expansion.

Original languageEnglish (US)
Article number101258
JournalJournal of World Business
Volume56
Issue number6
DOIs
StatePublished - Oct 2021
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Marketing

Keywords

  • Behavioral theory of the firm
  • Entry into new foreign markets
  • Industry growth rate
  • Moderating effect
  • Opportunity costs
  • Performance feedback
  • Timing of entry

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