A name assumption ts that market Knowledge and market comrmtment arrest both commitment decisions and the way current decisions are performedand these, in turn, change market knowledge and commitment. The concept of market commitment is assumed to be composed of two factorsthe amount of resources committed and the degree of commitment. The amount of resources could be operationalized as the size of investment in the market (marketing, organization, personal, etc.), while the degree of commitment refers to the difficulty of nding an alternative use for the resources and transferring them to the alternative use. The latter concept seems to be close to the concept of sunk cost. International activities require both general knowledge and market specic knowledge. Market-specific knowledge is assumed to be gained mainly through experience in the market, whereas knowledge of the operations can be transferred from one country to another; the latter will thus facilitate lateral growth. A direct relation between market knowledge and market commitment is postulated: Knowledge can be considered as a dimension of human resources. Consequently, the better the knowledge about a market, the more valuable are the resources and the stronger the commitment to the market. This is assumed to be especially true of experiential knowledge