Competition at home and foreign market entry timing
ISSN: 1525-383X
Article publication date: 24 August 2018
Issue publication date: 16 April 2019
Abstract
Purpose
Research has identified inverted U-shaped relationships between domestic competitive position, often cast in terms of home-country market share or relative profitability, and speed of entry into a foreign market. However, in some industries, firms may be especially attentive and responsive to competition between firms in their local-home market (i.e. sub-national). Hence, this study aims to explore the effect of local-home market competitive intensity on the relationship between a firm’s overall competitive position and speed of entry into a foreign market.
Design/methodology/approach
Data from 114 large US corporate law firms from 1992 through 2008 were used for Cox proportional-hazards regression models to estimate the moderating effect of local-home market competitive intensity on the relationship between relative profitability at the national level and speed of entry (i.e. hazard rate) into China.
Findings
Less-dominant firms from highly competitive local-home markets entered China more quickly than less-dominant firms from less-competitive local-home markets. In addition, first-movers from highly competitive local-home markets tended to have more advantageous competitive profiles, as reflected in profitability, than first-movers from less-competitive local-home markets.
Originality/value
This research explores an important contingency in the relationship between a firm’s competitive position at home and timing of entry into a foreign market. Additionally, the results suggest that first-movers from less-competitive local-home markets may face immediate competition from better-positioned first-movers from more competitive locations within the same home market when they enter new markets.
Keywords
Citation
Powell, K.S. (2019), "Competition at home and foreign market entry timing", Multinational Business Review, Vol. 27 No. 1, pp. 99-118. https://doi.org/10.1108/MBR-10-2017-0070
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited