Market entry and international technology transfer: A case analysis of ten U.S. high-tech firms in China and Southeast Asia

Abstract

This research analyzes two issues: (1) MNCs' foreign entry process, and (2) the relationship between foreign entry strategy and international technology transfer. The study is based on a comparative case analysis of ten U.S. high-tech manufacturers operating in the Asian Pacific Rim.We analyzed firms' foreign entry processes and compared them with the predictions of internationalization theory. We also studied the causal relationship between a firm's international technology transfer policy and its foreign entry strategy.We found support for companies' incremental Asian commitment in terms of operating mode; however, their reasons were different from those professed in internationalization theory. We also found that foreign entry process varies with the purpose and nature of foreign business activities. The stage theory is less applicable to firms that follow customers into foreign markets, firms whose foreign expansion is to improve customer service, and firms that must produce abroad to sell abroad. Finally, host government policies also tend to limit the applicability of the stage process model.In addition, we found that companies' desire to sell abroad was the overriding consideration to enter foreign markets. As such, they accepted operating modes to maximize their sales, even at the risk that collaborative partners could more easily appropriate the technologies they transferred. However, the danger of technology loss was mitigated by a belief that their core competency was the ability to develop ever-newer technologies rather than the product and process technologies they transferred.

Citation

(Rongxin) Chen, R., Cannice, M.V. and Daniels, J.D. (2001), "Market entry and international technology transfer: A case analysis of ten U.S. high-tech firms in China and Southeast Asia", Axinn, C.N. and Matthyssens, P. (Ed.) Reassesing the Internationalization of the Firm (Advances in International Marketing, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 133-155. https://doi.org/10.1016/S1474-7979(01)11018-5