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Effects of international entry‐order strategies on foreign subsidiary exit: The case of Korean chaebols

Young‐Ryeol Park (Yonsei School of Business, Yonsei University, Seoul, South Korea)
Jeoung Yul Lee (Hongik University, Yeongi‐gun, Chungcheongnam‐do, South Korea)
Sunghoon Hong (Department of International Trade, Honam University, Gwangju, South Korea)

Management Decision

ISSN: 0025-1747

Publication date: 18 October 2011

Abstract

Purpose

The objective of this paper is to determine whether international entry‐order strategies by Korean chaebols affect the exit of their foreign subsidiaries.

Design/methodology/approach

The sample consists of a set of 61 parent firms and their 500 foreign subsidiaries. The sample includes 27 Korean business groups, called chaebols, and spans 51 markets, during the period from 1999 to 2004. The study employs resource‐ and knowledge‐based views, and is based on the Cox's proportional hazard model.

Findings

This study leads to two main findings: in the context of Korean business groups, latecomers in international markets have greater survival rates than pioneers do because latecomers have stronger resource commitments; and, nonetheless, if chaebol pioneers have greater competitive advantages than chaebol latecomers, the pioneers' subsidiaries have better survival rates than do those of latecomers.

Originality/value

The analysis advances order‐of‐entry research by exploring the international order‐of‐entry strategies of chaebol multinationals and their impact on international exit and the interrelationship between the order‐of‐entry and core competencies of chaebol multinationals.

Keywords

Citation

Park, Y., Yul Lee, J. and Hong, S. (2011), "Effects of international entry‐order strategies on foreign subsidiary exit: The case of Korean chaebols", Management Decision, Vol. 49 No. 9, pp. 1471-1488. https://doi.org/10.1108/00251741111173943

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited