Knowledge-acquisition strategies and the effects on market knowledge – profiling the internationalizing firm

Knowledge management and experiential knowledge in particular has for long been at the core of theory on the behavior of internationalizing firms. However, the strong emphasis on direct experience in extant literature has been challenged. This study addresses the influence of various knowledge-acquisition strategies on market knowledge. Empirical studies on this topic are largely missing. The empirical base for this study is 144 internationalizing Swedish firms operating in the Baltic States, Poland, Russia, or China. Four knowledge acquisition strategies are identified based on the utilization of knowledge sources. The strategies are profiled through a cluster analysis, which is validated using a regression analysis to show the effects of strategy on market knowledge. The results show that firms with a passive strategy have less market knowledge. Firms that are focusing primarily on internal or external sources hold equal levels of knowledge about the market. Firms actively utilizing all available sources have the highest levels of market knowledge. This calls for a reevaluation of the relative importance of direct experiential knowledge in internationalization processes and supports the notion that more sources of knowledge than direct experience need to be taken into account in order to understand internationalization behavior.