Wanted: strategic partners for young firms eager to enter foreign markets

Abstract

Purpose

This paper aims to investigate the relationship between strategic asset-seeking intent and firms’ entry strategies of foreign investment in the context of emerging market firms.

Design/methodology/approach

This study is based on survey data of 392 Chinese foreign direct investment projects. Structural equation modelling is used for data analysis.

Findings

With stronger strategic asset-seeking intent, emerging market multinational enterprises are likely to locate their subsidiaries in developed countries, use a wholly owned subsidiary mode and invest with greater intensity, while they do not have a clear preference in entry timing.

Practical implications

The strategic asset-seeking intent applies not only to emerging market firms but also to small and medium firms in general that have limited resources and a need to catch up with stronger competitors. This study therefore provides guidance to these firms.

Originality/value

This study contributes by investigating how the strategic asset-seeking intent affects firms’ strategies. The findings have practical implications for strategic managerial decisions that lead to sustained competitive advantage and improved firm performance.

Citation

Mi, L., Kang, Y. and Liu, Y. (2020), "Wanted: strategic partners for young firms eager to enter foreign markets", Journal of Business Strategy, Vol. 41 No. 1, pp. 3-10. https://doi.org/10.1108/JBS-11-2018-0196