The literature on International Market Selection (IMS) contains many proposed models which make significant contributions but do not effectively address the IMS problem. A new tradeoff model is proposed that uses two key constructs, demand potential and trade barriers, as well as firm strategy as a contingency construct. Each key construct is measured by only four variables, resulting in simplicity and low application cost, and strategy is used to develop weights for the variables. The model is tested in real market conditions for 17 target countries and three diverse products over a six-year period. The weighting solution that favors demand potential is shown to have strong predictive power for the short to medium term. In addition to being tested and validated, the model introduces a number of advances including the weighting of indicators, an approach to quantifying nontrade barriers, and validation for two different exporting countries.

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International Business Review
Sprott School of Business

Papadopoulos, N, Chen, H. (Hongbin), & Thomas, D.R. (D. R.). (2002). Toward a tradeoff model for international market selection. International Business Review, 11(2), 165–192. doi:10.1016/S0969-5931(01)00054-3