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Change of foreign operation method: impetus and switching costs
Institution:1. Department of International Economics and Management, Copenhagen Business School, Copenhagen, Denmark;2. Department of Strategy, Norwegian School of Management BI, Elias Smiths vei 15, N-1302 Sandvika, Norway;1. Department of Orthopedic Surgery, Hadassah-Hebrew University Medical Center, Jerusalem, Israel;2. Department of Orthopedic Surgery, Thammasat University, Pathumthani, Thailand;1. Institute of Control and Complex Systems, University of Duisburg-Essen, Duisburg, North Rhine-Westphalia, Germany;2. School of Automation and Electrical Engineering, University of Science and Technology Beijing, Beijing, China;1. Beijing Key Laboratory for Pediatric Otolaryngology, Head and Neck Science, Department of Otolaryngology Head and Neck Surgery, Beijing Pediatric Research Institute, Beijing Children''s Hospital, Capital Medical University, Beijing, China;2. Department of Otolaryngology Head & Neck Surgery, Beijing Tsinghua Changgung Hospital, Beijing, China;3. Department of Otolaryngology Head & Neck Surgery, Beijing Tongren Hospital, Capital Medical University, Beijing, China;4. Department of Otolaryngology, Beijing First Hospital of Integrated Chinese and Western Medicine, Beijing, China;1. Air Quality Research Center, University of California, Davis, USA;2. Center for Health and the Environment, University of California, Davis, USA;3. Mechanical and Aeronautical Engineering, University of California, Davis, USA;4. Civil and Environmental Engineering, University of California, Davis, USA;5. Land, Air and Water Resources, University of California, Davis, USA;6. Crocker Nuclear Laboratory, University of California, Davis, USA;1. Department of Medical Imaging, St Michael’s Hospital, Toronto, Ontario, Canada;2. Faculty of Medicine, University of Toronto, Toronto, Ontario, Canada;3. University of Toronto, Scarborough, Ontario, Canada;4. Keenan Research Centre, Li Ka Shing Knowledge Institute, Toronto, Ontario, Canada
Abstract:This paper explores what factors motivate exporters to change their foreign market servicing mode from using independent distributors and agents to setting up their own local sales organization, and what factors impede such changes (switching costs). Using data from a sample of 214 Danish exporters, of which 32 had changed their foreign operation method between 1992 and 1997, the analysis shows that switching cost factors are indeed of particular importance in order to explain the incidence of such changes.
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