Search results

This paper aims to study whether the adoption of an entry mode that fits the social trust level contributes to the improvement of foreign subsidiary performance.

The authors used the Probit model, linear regression, strategic fit approach and instrumental variable regression. The sample was made up of 11,095 observations of Chinese multinational enterprises' foreign subsidiaries in 54 countries from 2005 to 2020.

The results suggest that a host country with a high level of social trust results in fewer difficulties for enterprises in gaining legitimacy, thus foreign subsidiaries are more likely to select the wholly owned entry mode. The results also show that the effect is contingent on the formal institutions of host countries. The results of the mechanism test suggest that social trust influences subsidiaries' entry mode choice by reducing information asymmetry, costs and uncertainty risks. This study further finds that selecting a fit entry mode based on social trust level substantially increases foreign subsidiary performance and this effect is more significant when multinational enterprises (MNEs) are state-owned enterprises (SOEs).

The main limitation of this paper is its only focus on foreign subsidiaries of Chinese MNEs, which may limit the generalizability of research findings.

This paper responds to the call for conducting more research on informal institutions. Findings highlight the critical role of informal institutions in helping foreign subsidiaries in gaining legitimacy in host countries and the essentialness of selecting a fit entry mode based on the informal institutions of host countries for the development of foreign subsidiaries.

This study aimed to identify a specific taxonomy of entry modes for international construction contractors and to develop a decision-making mechanism based on case-based reasoning (CBR) to facilitate the selection of the most suitable entry modes.

According to the experience orientation of the construction industry, a CBR entry mode decision model was established, and based on successful historical cases, a two-step refinement process was carried out to identify similar situations. Then the validity of the model is proved by case analysis.

This study identified an entry mode taxonomy for international construction contractors (ICCs) and explored their decision-making mechanisms. First, a two-dimension model of entry mode for ICCs was constructed from ownership and value chain dimensions; seven common ICC entry modes were identified and ranked according to market commitment. Secondly, this study reveals the impact mechanism of the ICC entry mode from two aspects: the external environment and enterprise characteristics. Accordingly, an entry mode decision model is established.

Firstly, sorting out the categories of entry mode in the construction field, which provide an entry mode list for ICCs to select. Secondly, revealing the impact mechanism of ICC entry mode, which proposes a systematic decision-making system for the selection of ICC entry mode. Thirdly, constructing a CBR entry mode decision-making model from an empirical perspective, which offers tool support and reduces transaction costs in the decision-making process.

The study on entry modes for ICCs is still in the preliminary exploratory stage. The authors investigate the entry mode categories and decision-making mechanisms for ICCs based on Uppsala internationalization process theory. It widens the applied scope of Uppsala and promotes cross-disciplinary integration. In addition, the authors creatively propose a two-stage retrieval mechanism in the CBR model, which considers the order of decision variables. It refines the influence path of the decision variables on ICCs' entry mode.

This paper aims to examine whether the cultural distance between an international audit firm and target audit clients in emerging countries is associated with auditor choice decisions.

Based on a sample of 104,699 firm-year observations from 20 countries over 2009–2020, logit regression analysis is used to investigate the research questions.

The authors find strong evidence that cultural distance affects the auditor selection decision. The results suggest Big N auditors are more likely to be chosen by target audit clients in emerging countries with less cultural distance. In other words, target audit clients in emerging countries prefer to choose international audit firms whose cultural characteristics are similar. Moreover, results from two-stage least squares regression further suggest that the observed effect of cultural distance on auditor choice is unlikely to be driven by potential endogeneity.

The auditor choice is limited to companies hiring Big N auditors; the authors exclude any switches to non-Big N auditors or switches between Big N auditors. The study also suffers from the concerns about methodological and conceptual criticism that most studies about national culture have to deal with. Finally, through this paper, the authors carry out the auditor selection process from the target audit clients’ side; the authors do not discuss the supply side of the process.

The authors contribute to the audit choice literature by providing evidence that the cultural distance between the countries of audit firms and target audit clients plays a role in the auditor choice decision. The study complements the prior auditor choice literature, focusing primarily on Western economies, by structuring the sample scope to emerging market economies.

Drawing on an organizational learning perspective, this paper examines the effect of levels of foreign market involvement (intensity and geographic spread) on internationalization outcomes recognizing that the moderating influence of entry-mode learning potential is not well documented in the literature on small- and medium-sized enterprises (SMEs).

The sample includes 180 SMEs evenly selected from three industries: biotechnology, software and clothing (60 firms in each industry). The sampled firms employ less than 250 employees and are equally distributed between three developed economies and three emerging economies. All were engaged in foreign business.

The authors find that there is a direct relationship between levels of foreign market involvement and internationalization outcomes. Entry-mode learning potential moderates the relationship between intensity of foreign market involvement and internationalization outcomes but not the relationship between geographic spread and internationalization outcomes.

This study reveals several new insights that help explain the pathway through which foreign market involvement activities are translated into internationalization outcomes.

The authors conclude that the positive relationship between intensity of foreign market involvement and internationalization outcomes is strengthened when SMEs also use an entry mode with a higher learning potential than exporting only.

This paper aims to investigate the divestment behavior of emerging market multinationals from Latin America – multilatinas – by examining how their foreign market entry decision impacts the likelihood of subsidiary divestment.

The hypotheses are tested using Cox’s proportional hazard rate model in a longitudinal database of Brazilian multinational companies established in 43 countries.

Results indicate that these subsidiaries can thrive in environments that bear similarities to their home country, being less likely to divest in institutionally weak countries. Contrary to developed country multinationals, these firms benefit from foreign entry decisions that entail handling partnerships abroad; thus, wholly-owned greenfield (WOGF) investments have a higher likelihood of being divested.

To the best of the authors’ knowledge, this paper is the first to analyze foreign divestment from multilatinas, accounting for how entry mode strategy and host country institutions may impact these firms’ de-internationalization.

The purpose of this study is to analyse the internationalisation decision-making process using causation and effectuation.

The proposed hypotheses are tested with a survey data set of 148 Kenyan small and medium-sized enterprises (SMEs) to assess the pre-internationalisation decision-making of the firm. Multinomial logistic regression has been used to predict the categories from total effectuation to total causation.

The results of this study show that firm resources and capability provide a solid basis for firms' internationalisation. The entrepreneur becomes more effectual commence as they assess the firm's resource and capability. Entrepreneurs with a high entrepreneurial self-efficacy use both causation and effectuation with a bias towards effectuation. Increasing environmental predictability led the firms to use less effectuation, and increasing psychic distance entails high effectuation relative to high causation in the Kenyan context.

The sample choice of the category is Kenyan SMEs which may raise some questions. This study assumed that SMEs sampled had the same level of internationalisation experience regardless of the number of years in business.

This study theoretically advances the field of international business by combining the Uppsala internationalisation model with effectuation; this study defines four antecedents of decision-making to form its conceptual framework to study internationalisation decision-making approach for SMEs using the effectuation logic and adds to the stream of literature that has reviewed the factors that influence the internationalisation decision-making process for SMEs in developing countries.

This article aims to explore how cluster affiliation moderates the relationship between family involvement and speed of internationalization in family firms. The speed of internationalization is examined in terms of earliness and post-internationalization speed.

The research is based on a sample of 639 Portuguese family businesses (FBs) created and internationalized between 2010 and 2018 that was retrieved from the Iberian Balance Analysis System – SABI database. The partial least squares structural equation modeling (PLS-SEM) was used to assess the measurement and construct the model.

The results suggest that higher levels of family involvement in ownership and management make family firms enter on international markets in later stages of their development but, after the first international market entry, the firms are able to exhibit a higher post-internationalization speed. When considering the effect of cluster affiliation, the authors found that clustered FBs are more likely to engage in early internationalization and to accelerate the post-internationalization process than non-clustered FBs.

The study's findings are explained by the existence of socially proximate relationships with other cluster members, based on similarity, trust, knowledge exchange and sense of belonging, which push family firms to internationalize and increase their level of international commitment over time. The empirical evidence, therefore, highlights the primary role of industrial clusters in moderating the relationship between family involvement, earliness of internationalization and post-internationalization speed.

The case has been developed by using secondary sources of information.

Tesla’s much-awaited foray into the burgeoning Indian electric vehicle (EV) marketplace had hit the “high import tariff” roadblock. Discussions ensued and finally, Elon Musk, the CEO of Tesla and the Indian Government found common ground. The moot point of Tesla’s entry mode was resolved. Musk announced Tesla’s plan to set up an EV supply chain and manufacturing facility in the host country. This case discusses factors affecting location decision, market entry modes and international corporate-level strategies. Tata Motors sold affordable cars and was miles ahead in the EV race in India. Musk had to align Tesla’s India strategy with the company’s global strategy to woo the price-sensitive Indian consumers. What were the options available to him? This case examines different business-level strategic options that could help Tesla drive in the fast lane in India.

The case can be used in international strategy course at graduate level. It can also be used in a session on international marketing in marketing management course.

This perspective article aims to provide an overview of the interplay between international entrepreneurship and the dynamics of family businesses, with a particular focus on post-entry decisions.

This paper is based on a short literature review.

The convergence of international entrepreneurship and family businesses presents a compelling area of study, where post-entry decisions serve as a critical yet underexplored facet. Post-entry decisions in international entrepreneurship for family-owned businesses encompass responses to international crises and shocks and strategies for de-internationalization, restructuring or market exit.

This article synthesizes existing research, highlighting the importance of studying post-entry decisions in the realm of international family businesses. It encourages scholars and practitioners to delve into the unique challenges faced by these firms, ultimately enriching the understanding of international entrepreneurship within the family business context and providing valuable insights for both theory and practice.

This study seeks to investigate how managerial assumptions shape international market orientation (IMO) and how IMO, in turn, affects the performance of small and medium-sized enterprises (SMEs), drawing from cognitive theory and the resource-based view (RBV) to provide the theoretical framework.

The study focuses on the relatively unexplored domain of small and medium-sized enterprises (SMEs) in Japan. A survey was developed and tested using data from 303 Japanese SMEs. The study model was subsequently analyzed using the partial least squares (PLS) technique.

The study reveals a nuanced relationship between managerial frames of reference (FoRs) and IMOs. The results confirmed notable congruence between interfunctional market orientation and managers who exhibit a political FoR. They also revealed a positive correlation between professional FoR managers and customer market orientation. Additionally, the findings showed that entrepreneurial FoR managers displayed a significant association with competitive market orientation and Bureaucratic FoR matched with the three types of IMO. Finally, the results indicate that all three forms of IMO have a substantial impact on performance, albeit to varying degrees.

The applicability of our results to multinational corporations (MNCs) has not been evaluated. Since the primary focus was to identify the types of associations among FoR and IMO, the causal pathways and explanatory factors that underpinned these observed relationships were not examined in this study. Additionally, due to the geographical concentration of our sample in Japan, we were unable to conduct tests on the suggested model in other countries to validate and potentially generalize the research findings.

By developing an implicit understanding of the market orientation fit within the organization’s FoR, managers can enhance their understanding of competitors' activities and enable them to respond with greater efficiency.

To the authors’ knowledge, this is one of the rare papers that inspect the relationship between International market orientations and managerial assumptions as well as their effect on performance.