Throughout history, foreign expansion has been seen by leaders as a way of increasing and acquiring resources, crafts, knowledge, and markets. Often that expansion has involved invasions and wars. Today, the globalisation of society has driven us to the point where the battles are mostly fought in the board rooms of multinational companies rather than in the green fields of distant lands.
Research published in the Journal of International Business and Entrepreneurship Development looks at the theory underlying foreign market attractiveness and takes it as a reference for multinational entrepreneurial expansion and the prospects of related foreign ventures.
Maher Al Sayah, Charbel Salloum, and Hajer Jarrar of the USEK Business School, in Jounieh, Lebanon, Jacques Digout of the Toulouse Business School, in Paris, and Catherine Mercier-Suissa of the IAE Lyon School of Management, in Lyon, France, have tested the validity of the theory’s constraints in terms of social ties and relations. In so doing, they analyse how entrepreneurs weigh information regarding a foreign market opportunities brought to them through socially tied sources.
The team found that the trust factor between the entrepreneur and their socially tied sources of information negatively influences foreign market entry attractiveness theory. In other words, an entrepeneur might give less weight to economic indicators and political security factors when offered perhaps contrary information from a trusted source and so foreign markets that might be seen as wholly unattractive to another entrepeneur lacking that information.
Al Sayah, M., Salloum, C., Digout, J., Mercier-Suissa, C. and Jarrar, H. (2020) ‘Social ties, foreign market attractiveness and trust’, J. International Business and Entrepreneurship Development, Vol. 12, Nos. 2/3, pp.83–108.