An investigative analysis of the factors influencing degree of involvement in a foreign market

This paper focuses on factors that influence the degree of involvement in foreign markets. Using survey method, the research data was obtained from 112 usable responses from a sample of 500 UK companies which operate in at least two other countries. This represents a usable response rate of 22.4%, and consistent with similar research. The variables are grouped in terms of firm context (competition, organisation structure, competitive advantages, degree of standardisation) and host country context (economic development, culture differences, regulation, political risk). Regression analysis models are used to test the relationship between the independent variables and the degree of involvement. Findings strongly indicate a positive relationship between the degree of foreign market involvement and the level of competition and the degree of foreign market involvement and competitive advantage. Findings weakly support the hypothesis of a positive relationship between the degree of foreign market involvement and economic development. There is weaker evidence to show a negative relationship between the degree of foreign market involvement and the cultural dimensions of individualism and power distance as proposed by Hofstede.