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Home-peer firms (i.e. firms from the same industry and country) noticeably influence the internationalization behavior of small-to-medium-sized enterprises (SMEs). Drawing from vicarious learning literature, the authors theorize how home-peer firms' success in export markets affects SMEs' export intensity into those markets.

The authors test the hypotheses on a sample of 32,108 Canadian SME exporters. A Tobit model was used to examine the effect of home-peer performance and its interactions with firm age, export experience, and geographic and institutional distance on export entry intensity.

The authors find that SMEs are more likely to enter export markets with higher intensity if home-peer firms perform well in those markets. This home-peer influence is stronger when the SME lacks export experience, when the home-peer information is more recent, and when environmental uncertainty is high.

The study is among the first to show empirically that the performance of home-peers positively influences the export intensity of SMEs in international markets, suggesting that SMEs use this measure to inform their internationalization strategies.

The purpose of this paper is to develop and test a theoretical model of managerial decisions involving international market entry.

The authors propose a mathematical model that seeks the optimal level of cultural distance between the host and the home country and the market potential of the host country that maximizes a firm's investment in an international market. The authors illustrate the intuition and the managerial application of the model using a large data set of cross‐border acquisitions, then the results of this data set are used to validate the model in a specific data context.

The authors find that cultural distance and market potential have curvilinear and interaction effects on the level of equity participation. The empirical results are further used to conduct sensitivity analysis of decisions for changes in parameters.

The authors’ general approach can be used to analyze any two variables that have interaction effect on a variable of interest related to market entry strategies.

The authors illustrate the intuition and the managerial application of the model using a large data set of cross‐border acquisitions. Managers can use this approach in choosing CBA targets.

The study provides a mathematical framework and an empirical illustration of optimizing the cultural distance and market potential for maximizing equity participation in foreign market acquisitions. This is a new unique contribution to the literature.

To look at investor reactions to US investments made in India. Specifically, the authors look at the stock price reaction when US firms invest in the Indian market.

The authors look at investor reactions to US investments made in India, using event study methodology.

The authors' results indicate that there is a variation in market's reaction across firms belonging to different industries. They find mixed investor response to investments in India. The firms experience both positive and negative abnormal returns. There are also number of firms for which they do not get any significant results. Also, possible reasons for why there were no significant results for some firms: small investment by US firms in comparison to total investments, and most of the investments studied were sequential and not the first investment by a firm to Indian market. They also carry out a regression analysis, where they regress abnormal returns on important firm level characteristics, such as firm size, cash flows, and research and development expenditure. The authors find firm size has a significant positive impact on abnormal returns.

There is a need to carry out this study for a larger sample size over a larger time period, such that one can distinguish between first time investment and sequential investments. On average for their sample, investment in India by the US firms is small relative to their overall investment. This explains the lack of investor reaction for some cases. For future studies, it would be useful to look at high‐investment sectors in India.

Multinational network hypothesis, in line with internalization theory argue that due to differential degree of economic development between USA and developing countries, US firms' investments in these countries will enhance their multinational network. The multinational expansion will in turn substantially enhance firms' ability to internalize its foreign operations profitably, increasing shareholders' wealth. The authors do find these for some US firms.

There are no studies to the best of our knowledge on the Indian market.

The paper is in the domain of marketing strategies of multinational firms. Specifically, it aims to focus on target market selection of multinational firms.

Using the cultural, administrative, geographic, and economic distance framework proposed by Ghemawat, the authors offer empirical support for the role of different distance factors on firms' foreign market acquisition behavior. In addition, they examine the moderating role of market potential of a target country on the relationship between distance factors and target market selection. The context of the paper is multinational firms from developing countries. The sample consists of cross‐border acquisitions (CBAs) completed by firms from 18 emerging countries between 1990 and 2006. The authors use ordinary least squares and moderated regression analysis to determine the main effect of distance factors and the interaction effect of market potential.

The authors find that while cultural and geographic distance factors have a significant, negative impact on the number of CBAs, administrative and economic distances have a significant, positive effect. They also find that the market potential of target countries significantly moderates the relation between the distance factors and the number of CBAs.

The results show that the market potential of countries compensates and sometimes even overrides the role of distance. Future studies should expand this research to include industry‐specific factors.

The paper provides an empirical illustration of Ghemawat's distance framework. In addition, the paper highlights several boundary conditions of the impact of distance factors on firms' internationalization processes. Finally, the study enhances knowledge on foreign market entry behavior of firms from developing countries.

This paper has two overall goals. The first is to serve as a broad overview of the literature on the subject theme, with three main objectives in mind: to highlight the complexities of international market selection or segmentation as a field of study and as a strategic decision by international firms; to explore the various ways and perspectives from which this area has been studied; and to suggest areas for future research by drawing on the preceding discussion. The second goal of the paper is to act as an introduction to the IMR special issue on the title theme, by outlining the special issue's objectives and the contributions to it.

Drawing on the relevant literatures, the paper begins by outlining the factors that make the field complex in both theoretical and applied terms, moves to consider the research streams that comprise its main components, and concludes by drawing conclusions and implications for future research.

A large part of the complexity characterizing this field arises from the fact that it is closely intertwined with the broader area of internationalization and a number of other decisions related to it, such as the “go/no‐go” decision and the firm's choice of mode of entry. From the research perspective, theory development has been impeded by a high degree of fragmentation, which has resulted in various different streams studying the same general issues from widely different perspectives.

The paper identifies a large number of directions for potential future research, not the least of which is the need for integrative research that addresses the fragmentation identified in the study.

Although this is primarily a theoretical paper directed at researchers, practitioners can gain useful insights from it by examining the various factors that have a bearing on their internationalization decisions.

The objectives of the main part of the paper will have been met if it succeeds in stimulating interest in further research and discussion on the core issues. The second part summarizes the contributions to the special issue and draws attention to the main message that each aims to convey.