2.4. Market distances and EE
Sousa and Bradley (2006) define market distances as differences–economic, legal, social, and cultural–between domestic and foreign markets where the organization operates, as individuals in charge of the export activity perceive. Market distance is one of the main cognitive barriers to organizations' internationalization processes, and strongly affects how and when to enter foreign markets (Dow & Larimo, 2009). Thus, market distance makes export firms appear more conservative in marketing-mix programs (Sousa & Bradley, 2009). This conservatism limits entrepreneurial orientation by the exporter and gradually slows internationalization process down (Prime, Obadia, & Vida, 2009).
These arguments lead to the fourth research hypothesis.
H4.
Market distances between the countries where the firm operates negatively affect EE level.