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Distance and perceptions of risk in internationalization decisions

Kraus, Sascha
Eggers, Felix
Cesinger, Beate
Published in Journal of Business Research. 2015, vol. 68, no. 7, p. 1501-1505
Abstract This study examines top managers’ risk perceptions in internationalization decisions. 126 CEOs and top managers responsible for internationalization in companies with headquarters in Germany, Switzerland, or Austria took part in our experiment. Applying random utility theory in a conjoint choice experiment enables the measurement of top managers’ preferences for target countries and entry modes. Country-specific measures of geographic, cultural, economic, and political distances serve as covariates to explain country preferences and to quantify the effect on internationalization decisions. Our results show that distance dimensions are the primary drivers of risk assessment, whereas entry-mode choice is secondary. Internationalization may therefore be a hierarchical decision in which managers choose target market (and risk profile) and view entry-mode choice as subordinate to other environmental factors.
Keywords InternationalizationRiskChoice experimentConjoint analysisDistances
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KRAUS, Sascha et al. Distance and perceptions of risk in internationalization decisions. In: Journal of Business Research, 2015, vol. 68, n° 7, p. 1501-1505. doi: 10.1016/j.jbusres.2015.01.041 https://archive-ouverte.unige.ch/unige:73805

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Deposited on : 2015-07-02

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