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Entry mode deviation: A behavioral approach to internalization theory

Elia, Stefano; Larsen, Marcus Møller; Piscitello, Lucia
Journal article, Peer reviewed
Accepted version
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Locked until 16. April 2020, due to publishers policy. (934.7Kb)
URI
http://hdl.handle.net/11250/2596549
Date
2019
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  • Publikasjoner fra CRIStin - BI [650]
  • Scientific articles [1334]
Original version
10.1057/s41267-019-00235-7
Abstract
We explore when and why decision makers choose international entry modes (e.g., hierarchies or markets) that deviate from internalization theory’s predictions. By applying a cognitive perspective on entry mode decision making, we propose that the performance of prior international activities influences decision makers’ behavior in different ways than assumed in internalization theory. More specifically, due to a representativeness bias, underperforming (overperforming) past ventures influence the decision to change (continue using) the previous entry mode choice, which may result in an entry mode deviation. In addition, the propensity to deviate from theoretical predictions is stronger when the experience is recent and/or salient due to an availability bias. In conclusion, we argue that internalization theory can benefit from incorporating more systematically important behavioral assumptions on how firms enter international markets. In so doing, we contribute to the recent conversation on how variations in human behavior influence internalization theory.
Publisher
Springer
Journal
Journal of International Business Studies
Copyright
"Authors may self-archive the author’s accepted manuscript of their articles on their own websites. Authors may also deposit this version of the article in any repository, provided it is only made publicly available 12 months after official publication or later."

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