The role of market orientation, relational capital, and internationalization speed in foreign market exit and re-entry decisions under turbulent conditions

Serdar Yayla, Sengun Yeniyurt, Can Uslay, Erin Cavusgil

Research output: Contribution to journalArticlepeer-review

51 Scopus citations

Abstract

Firms’ internationalization strategies can vary with changing environments. Occasionally, a firm may choose to re-enter a foreign market it had abandoned in the past if environmental conditions have improved. The present study provides insight into the foreign market exit and subsequent re-entry processes. Specifically, we utilize the strategic flexibility perspective to investigate the impact of market orientation, relational capital, and internationalization speed on market exit and re-entry decisions under turbulence in a host market. Using a sample of 156 Turkish firms that operated during the Arab Spring in the Egyptian market between 2010 and 2015, we find that the market-oriented firms are more flexible in their market exit decisions than less market-oriented organizations. In addition, relational capital specific to the host country has a negative impact on market exit decisions under conditions of political conflict. The results also suggest that strong ties with partners in the host country increase the propensity to re-enter the market.

Original languageEnglish (US)
Pages (from-to)1105-1115
Number of pages11
JournalInternational Business Review
Volume27
Issue number6
DOIs
StatePublished - Dec 2018

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Marketing

Keywords

  • Internationalization speed
  • Market exit
  • Market orientation
  • Market re-entry
  • Market turbulence
  • Relational capital

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