Journal
ENVIRONMENT AND PLANNING A
Volume 37, Issue 10, Pages 1727-1750Publisher
PION LTD
DOI: 10.1068/a3727
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This paper develops conceptual and empirical evidence for the importance of social practice institutions in the internationalisation process of management-consulting firms. Personal trust and reputation rather than price are examined as key mechanisms of foreign market entry and penetration. Empirical case studies in London, Frankfurt, and Madrid produce three findings. First, enduring client relations and client referrals facilitated most foreign firm entries and the majority of local client acquisition. Second, interview findings imply a critical assessment and rcconceptualisation of trust and reputation. Empirically, goodwill trust and networked reputation are substantiated as particularly important transaction mechanisms. Third, a triangulation of interview and survey data reveals a causal relation between trust and reputation that enhanced a cumulative growth of social networks within the new host markets. This research points to the importance of social practice institutions for economic organisation and exchange across geographic distance.
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