A classic model of international entries - the Uppsala model - postulated that firms enter foreign countries in increasing order of psychic distance between the home and the host country to minimize the risk of failure. A question that was left unanswered was whether this sequence of entry results in any performance benefits. Literature on the impact of psychic distance, or its components like culture distance, on the performance of foreign operations abounds but the order of entry that is critical to the Uppsala model remains conspicuously absent. This paper presents an analysis of foreign country entries and exits by American multinationals in the manufacturing and services sectors since 1965. Companies that enter foreign countries in increasing order of culture distance do gain a significant performance advantage over those who do not. Changes over time and across industry sectors are discussed.
The Version of Record of this Author Manuscript has been published and is available using the DOI below.
Journal of Transnational Management
Singh, Suresh, "Impact of Sequence of International Entries on Country Exits" (2017). Management and Marketing Faculty Publications. 8.
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