Industrial Network Membership: reducing psychic distance hazards in internationalization of firms

Pertencer a Redes Industriais: reduzindo os efeitos da distância psíquica na internacionalização da empresa

Pertenencia a la red Industrial: reduciendo los riesgos de la distancia psíquica en la internacionalización de la empresa

ABSTRACT

The network approach to internationalization of firms has been the research focus of many international business scholars. Firms are increasingly involved in international business ventures and arguably need to learn to adapt to the idiosyncratic milieus of foreign markets. This paper proposes a conceptual model suggesting that integration in industrial networks strengthens corporate competitiveness in international markets. Network membership provides access to knowledge and a wider array of physical, technical, reputational and financial resources that facilitate adaptation to the various dimensions - economic, political, legal, cultural - of international business environments. Membership in social and business networks is likely to ease internationalization by reducing the psychic distance perceived by firms.

Key words:
Networks; Internationalization theories; Psychic distance