This study explores the impact of experiential knowledge on the perceived cost of internationalization, focusing on service firms. Using a behavioral approach, the research develops and tests three hypotheses. The first hypothesis suggests that a firm's lack of foreign business knowledge increases the perceived cost of internationalization. The second hypothesis states that a lack of foreign institutional knowledge also increases perceived cost. The third hypothesis posits that a lack of internationalization knowledge leads to higher perceived costs. The study uses a LISREL-based structural model to test these hypotheses on a sample of 362 service firms. The analysis shows that a lack of internationalization knowledge has a strong impact on the lack of both business and institutional knowledge, which in turn influence the perceived cost of internationalization. However, there is no direct effect of lack of internationalization knowledge on perceived cost. The study also finds that the perceived cost is influenced by the firm's experience in foreign markets and the type of industry in which the firm operates. The results indicate that firms with more experience in international markets have lower perceived costs. The study also highlights the importance of experiential knowledge in the internationalization process, as it helps firms to better understand foreign markets and reduce the risks associated with internationalization. The findings suggest that firms should focus on developing experiential knowledge to reduce the perceived costs of internationalization. The study also emphasizes the importance of organizational routines and structures in the internationalization process, as they play a crucial role in managing the costs associated with internationalization. The study concludes that experiential knowledge is a critical factor in the internationalization process, and that firms should invest in developing this knowledge to enhance their internationalization efforts. The study also highlights the importance of managerial perceptions in the internationalization process, as these perceptions can significantly influence the perceived costs and the success of internationalization efforts. The study provides valuable insights into the role of experiential knowledge in the internationalization process and offers practical implications for firms seeking to expand internationally.This study explores the impact of experiential knowledge on the perceived cost of internationalization, focusing on service firms. Using a behavioral approach, the research develops and tests three hypotheses. The first hypothesis suggests that a firm's lack of foreign business knowledge increases the perceived cost of internationalization. The second hypothesis states that a lack of foreign institutional knowledge also increases perceived cost. The third hypothesis posits that a lack of internationalization knowledge leads to higher perceived costs. The study uses a LISREL-based structural model to test these hypotheses on a sample of 362 service firms. The analysis shows that a lack of internationalization knowledge has a strong impact on the lack of both business and institutional knowledge, which in turn influence the perceived cost of internationalization. However, there is no direct effect of lack of internationalization knowledge on perceived cost. The study also finds that the perceived cost is influenced by the firm's experience in foreign markets and the type of industry in which the firm operates. The results indicate that firms with more experience in international markets have lower perceived costs. The study also highlights the importance of experiential knowledge in the internationalization process, as it helps firms to better understand foreign markets and reduce the risks associated with internationalization. The findings suggest that firms should focus on developing experiential knowledge to reduce the perceived costs of internationalization. The study also emphasizes the importance of organizational routines and structures in the internationalization process, as they play a crucial role in managing the costs associated with internationalization. The study concludes that experiential knowledge is a critical factor in the internationalization process, and that firms should invest in developing this knowledge to enhance their internationalization efforts. The study also highlights the importance of managerial perceptions in the internationalization process, as these perceptions can significantly influence the perceived costs and the success of internationalization efforts. The study provides valuable insights into the role of experiential knowledge in the internationalization process and offers practical implications for firms seeking to expand internationally.