Explaining the entry mode choice among Tunisian exporting firms: Development and test of an integrated model

Abstract

Purpose

Managers involved with export marketing are concerned first with entry mode decisions for their foreign expansions. The purpose of this paper is to examine the key factors that influence the exporting firm's foreign market entry mode choice. It aims to test empirically the hypothesized relation between three kinds of determinants – i.e. transaction costs, export behavior, and channel environment – and the likelihood of selecting an integrated as opposed to an independent mode.

Design/methodology/approach

Through an analytical review, research hypotheses were built. An empirical investigation was carried out among 420 exporting firms, which were surveyed to explore the determinants of their entry mode choice decision. Exploratory factor analysis and confirmatory factor analysis are employed to extract and test key influential factors on the basis of the data of this sample. Then, logistic regression models are used to determine the likelihood relationships between the exporting mode and the declined variables.

Findings

The results show that not all constructs hypothesized with the entry mode relationship were introduced into the model, and only three variables were retained that were significant in predicting the entry mode choice: two transaction costs variables and one export behavior variable. None of the channel environment variables was maintained by the main effects model; they constituted only pure moderators of the relationship between the transaction costs factors and the entry mode choice decision.

Research limitations/implications

Although probably classified within the category of classical research, the paper can easily contribute to the current literature in more than one way. But the research does contain certain limitations, mainly with sampling procedures. The main limitation is that the sample was one of convenience and did not respect the heterogeneous character of the subjects, with the result that the different empirical tests are not easily generalizable.

Practical implications

This research should help managers to identify some of the circumstances under which direct exporting modes might be deployed to enhance international marketing performance in foreign markets. Direct exporting should be considered in the area of small and medium‐sized exporting firms at the outside of a new industrialized economy. It might be concerned within an adaptive marketing approach where the environment pressures have only moderating effects.

Originality/value

The paper offers interesting insight into the decision tools in international marketing. Principally, the empirical study makes a major contribution to the limited body of empirical knowledge on entry mode choice for the exporting activities of small and medium‐sized enterprises in the context of an emerging economy. It points out the fundamental value of the transaction costs approach and verifies the theoretical assumptions of the moderating effects of the environment variables.

Citation

Khemakhem, R. (2010), "Explaining the entry mode choice among Tunisian exporting firms: Development and test of an integrated model", European Journal of Marketing, Vol. 44 No. 1/2, pp. 223-244. https://doi.org/10.1108/03090561011008682