Cognitive psychology ideas about the basic level of categorization are applied to the categories firms use context of foreign market entry. A category's distinctiveness and informativeness relative to more specific or more generic alternatives determine whether that category's membership provides legitimacy benefits to firms. For example, the 'restaurant' category may appeal fewer investors and customers and market entrants because the more specific 'Italian restaurant' category is more informative and not that much less distinctive.
- Social category
- Foreign market entry