Title: Understanding legitimacy in the foreign market entry process

Authors: Sabine Gebert Persson, Eniko Kaptalan-Nagy

Addresses: School of Economics and Social Sciences, Dalarna University, SE-791 88 Falun, Sweden. ' Department of Business Studies, Uppsala University, Box 513, SE-751 20 Uppsala, Sweden

Abstract: From a network perspective, entering a foreign market is seen as establishing relationships across borders. In this article, however, it is argued that apart from and/or along with developing relationships, it is vital to consider how the entrant firm understands what is perceived as legitimate. The purpose, therefore, is to develop the research on foreign market entry processes by focusing on the entrant firm|s understanding of host country actors| expectations on its behaviour, providing legitimacy to the entrant firm. It is proposed that the foreign market entry process is affected by the degree of internationalisation in the home market network, the structure of the host country network, and the coercive, as well as the normative pressures. One implication is that an entrant firm must understand the correspondence between its interpretations and the host country|s real expectations.

Keywords: legitimacy; market entry; institutional theory; socio-political environment; business environment; networks; expectations; relationship development; foreign markets; host country; expectations; internationalisation.

DOI: 10.1504/IJBE.2009.028795

International Journal of Business Environment, 2009 Vol.2 No.4, pp.453 - 467

Available online: 30 Sep 2009

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