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Closing knowledge gaps in foreign markets

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<mark>Journal publication date</mark>10/2008
<mark>Journal</mark>Journal of International Business Studies
Issue number7
Volume39
Number of pages17
Pages (from-to)1097-1113
Publication StatusPublished
<mark>Original language</mark>English

Abstract

The study explores how firms close their knowledge gaps in relation to business environments of foreign markets. Potential determinants are derived from traditional internationalization process theory as well as more recent literature on organizational learning processes, including the concept of absorptive capacity. Building on these two literature streams a conceptual model is developed and tested on a set of primary data of Danish firms and their foreign market operations. The empirical study suggests that factors considered essential in traditional internationalization process theory, such as experiential learning, explains only a very limited part of perceived knowledge gaps. When factors pertaining to the concepts of absorptive capacity and superstitious learning are added, the explanatory power improves significantly. Apparently, our understanding of firms' internationalization processes can be enriched by insights from organizational learning literature.