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Book part
Publication date: 23 November 2017

Jonas F. Puck, Markus Hödl, Igor Filatotchev and Thomas Lindner

We build on the resource-based view and extend entry mode research by focusing on firms’ intention to transfer different resources from the parent firm to its overseas…

Abstract

We build on the resource-based view and extend entry mode research by focusing on firms’ intention to transfer different resources from the parent firm to its overseas subsidiary. In line with our hypotheses, we find that parent firms that plan to transfer high levels of intangible resources to their foreign subsidiaries tend to choose wholly owned subsidiaries, while firms that intend to transfer high levels of tangible resources tend to choose international joint ventures. Moreover, we find that these relationships are moderated by institutional distance. We test our hypotheses using unique primary data from a sample of 128 foreign subsidiaries in the People’s Republic of China. Our results have important theoretical implications for international business strategy research as they develop further existing entry-mode theories.

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Distance in International Business: Concept, Cost and Value
Type: Book
ISBN: 978-1-78743-718-0

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Article
Publication date: 1 April 2020

Changhyun Park

The purpose of this study is to explore market entry strategies in a high-tech successive generations (HTSGs) market, by investigating entry mode via entry timing and path…

Abstract

Purpose

The purpose of this study is to explore market entry strategies in a high-tech successive generations (HTSGs) market, by investigating entry mode via entry timing and path differentiation and the performance outcomes of entry mode.

Design/methodology/approach

The methodology of building a theory from a longitudinal case study is adopted by using useful cases in a HTSGs market after constructing an integrated research framework to explore market entry mode. Different entry modes were investigated by studying entry timing and migration path of three firms’ case in logic semiconductor market. In addition, performance outcomes of different entry modes were measured and correlated with each other.

Findings

The results identified three major entry modes suitable for a HTSGs market. The three firms differentiated their entry modes by exploiting different entry timings from the earliest to the last and different migration paths including switching, leapfrogging and new entrance path to enter a market. First mover advantage also exists in a HTSGs market, and it was found uniquely that the financial performance denoted by entry mode outcomes was correlated with technological knowledge.

Research limitations/implications

This study extends the theory of extant entry strategy from general consumer or industrial market to HTSGs market, in which intense competition exits and technological innovation is important. Moreover, this study verified that the causality between early entry and positive performance was also effective in HTSGs market with a shorter duration of early entry advantage.

Practical implications

This study has managerial implications for firms to establish market entry strategy in HTSGs market and other markets. To become a product leader, a fast follower or a late follower, firms can differentiate their entry mode by adjusting the entry timing and migration path in the context of market and technology.

Originality/value

This study examined market entry strategies suitable for HTSGs market based on its unique characteristics and extended relevant theory into HTSGs market. Further, an integrated research framework, which explores the market entry mode, was constructed to facilitate further exploration of entry mode into other markets.

Details

Journal of Business & Industrial Marketing, vol. 35 no. 11
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 18 November 2018

Subhasree Mukherjee and Deepak Dhayanithy

By applying upper echelons perspective to the choice of full or shared control entry modes, this study aims to explore the moderating effect of interorganizational network…

Abstract

Purpose

By applying upper echelons perspective to the choice of full or shared control entry modes, this study aims to explore the moderating effect of interorganizational network on the top management team (TMT) characteristics and entry mode choice relationship. Existing studies on TMT’s demographic characters’ influence on entry mode choice remains inconclusive. The implicit assumption in extant literature is that firms share similar network structural advantages. This study integrates the largely ignored, network structural concept with entry mode to show how firm-level decisions are the outcome of interaction between internal and external environment.

Design/methodology/approach

The interorganizational network is modeled using board interlock data. The moderating effect of network is modeled on network size, centrality of the firms and density of ties, considering tenure and international experience of the upper echelons. The hypotheses are tested based on a sample of 83 publicly listed Indian firms from 2012 to 2015.

Findings

The findings indicate that despite a high international experienced TMT’s preference of full control entry mode, the high central position of the firm can influence the decision against full control entry modes. However, the choice of full control entry mode is also enhanced by the density of firm’s network. Similar evidence is also observed with tenure variable as well where the moderating variables showed a trend toward influencing the entry mode choices.

Originality/value

Thus, this study attempted to reconcile the inconsistencies prevalent in the relationship between TMT variables and choice of entry mode by introducing the contextual factor of interorganizational networks.

Details

Journal of Indian Business Research, vol. 11 no. 4
Type: Research Article
ISSN: 1755-4195

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Article
Publication date: 8 November 2011

Chuan Chen and John Messner

The decision on market entry mode, or how to enter a selected market, is of critical importance for international contractors' profit making and sustainable growth. Based…

Abstract

Purpose

The decision on market entry mode, or how to enter a selected market, is of critical importance for international contractors' profit making and sustainable growth. Based on a previous study, which successively identified ten basic entry modes specifically for international construction markets, this paper aims to focus on differentiating these entry modes in terms of organizational setting characteristics, compatibility, transferability, feasibility regarding different markets, and strategic effects so as to develop a systematic and comprehensive selection method for international construction market entry modes.

Design/methodology/approach

Market entry cases were collected through extensive archival analysis and interviews of practitioners. By a comparative analysis, how the entry modes differ by organizational setting characteristics is analyzed, and how they can be combined or sequenced to deliver a market entry process is empirically explored. The strategic effects which constitute the basis for selection among the entry modes and their combinations are identified, which include risk exposure, return, resource commitment, control, and flexibility.

Findings

How the basic entry modes can be combined and sequenced is mapped. The applicability of selected entry modes regarding 42 main country markets is reported. It is found that mobile entry modes and permanent entry modes differ in resource commitment, investment risk and strategic flexibility. Based on the results of the comparative case study, a process model for market entry mode selection is proposed.

Originality/value

The study provides theoretical implications for future studies to develop the market entry mode selection method. Practitioners can also obtain a better understanding of the relationship between the basic entry modes as well as the constraints and principles governing the selection between them.

Details

Engineering, Construction and Architectural Management, vol. 18 no. 6
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 31 December 2015

Mei Teh Goi

– The purpose of this paper is to examine the impact of cultural distance, governance quality, and market attractiveness on attachment of agents with a university.

Abstract

Purpose

The purpose of this paper is to examine the impact of cultural distance, governance quality, and market attractiveness on attachment of agents with a university.

Design/methodology/approach

A single university was chosen as a case study and secondary data were collected. The focus of this paper is on education agents who market higher education institution (HEI) in international market and recruit international students.

Findings

Multiple regression was performed and the finding indicated that governance quality and market attractiveness are significantly related with a number of agents attached to the marketing department of the university. However, cultural distance showed no significant relationship with agent attachment.

Research limitations/implications

The availability of data was most challenging in gathering data for this study because the culture of a country may change across time and the sample was based on only one case study, a minimal amount of information was obtained.

Practical implications

This study addresses the external factors that needed to be considered in selecting new agents.

Originality/value

This study contributes to the international marketing literature by a focus on HEI and focus on agency approach.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 28 no. 1
Type: Research Article
ISSN: 1355-5855

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Article
Publication date: 31 October 2008

Andreu Blesa and Maria Ripollés

The paper's objective is to demonstrate that marketing capabilities have positive effects on firms' international performance. These effects may be both direct and…

Abstract

Purpose

The paper's objective is to demonstrate that marketing capabilities have positive effects on firms' international performance. These effects may be both direct and indirect. Marketing capabilities foster international commitment and influence the choice of international entry mode. Through these, marketing capabilities exercise an indirect influence on international performance.

Design/methodology/approach

First, based on arguments from the dynamic capabilities perspective, the dynamic theory of strategy and the transaction‐cost theory, the effects of marketing capabilities on international performance are discussed. A survey was carried out on Spanish and Belgian international firms to test the model. SEM was used to analyse the relationships established in the hypotheses.

Findings

The results show coincidences between the samples in relation to the positive influences of companies' marketing capabilities on economic international performance, international commitment and international entry modes. Moreover, there is also a positive and significant influence of high direct investment entry modes on international economic performance. However, there are differences in other relationships.

Practical implications

The results inform on the kind of entry modes that can be selected, based on firm marketing capabilities, and which of them provide better international results.

Originality/value

This paper confirms that marketing capabilities are at the core of the company's international decisions. Specifically, it demonstrates that marketing capabilities influence both the international commitment of the company and the selection of the appropriate international mode of entry.

Details

International Marketing Review, vol. 25 no. 6
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 1 December 2002

Bowon Kim, Hyunchan Kim and Yoonseok Lee

As an exploratory study, our research aims to investigate what factors would influence choices of foreign market entry mode by system integration (SI) companies. There are…

Abstract

As an exploratory study, our research aims to investigate what factors would influence choices of foreign market entry mode by system integration (SI) companies. There are two distinct points. First, we specifically focus on a service industry, i.e., SI (System Integration) industry, which has unique features compared with other industries, yet not been studied extensively. Second, we indirectly examine whether forces influencing firms in an advancing country like Korea are different from those in more advanced countries: in this paper we investigate the Korean cases only, since most of the previous studies viewed this issue from the perspective of advanced countries.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 14 no. 4
Type: Research Article
ISSN: 1355-5855

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Article
Publication date: 19 October 2012

Shaista Nisar, Agyenim Boateng, Junjie Wu and Mary Leung

What drives small to medium‐sized enterprises’ (SMEs’) internationalisation strategy remains a significant issue in international business research, despite the huge…

Abstract

Purpose

What drives small to medium‐sized enterprises’ (SMEs’) internationalisation strategy remains a significant issue in international business research, despite the huge research efforts on this subject over the past three decades. The purpose of this paper is to investigate and compare the motives behind the equity modes of foreign market entry in Norway.

Design/methodology/approach

Employing a cross sectional survey, a sample of 146 firms consisting of 42 international equity joint ventures (IJVs), 53 cross‐border mergers & acquisitions (CBM&As) and 51 wholly owned subsidiaries (FWOS) from Norway was collected and analysed.

Findings

It was found that whereas market development and power influence the choice of IJVs and CBM&As, the need to access resources and control resources appear to be the most important motives behind FWOS as an entry mode choice. Moreover, the regression results indicate that market development and power, technology development, location advantage and synergistic gains appear to have a significant bearing on different entry mode choice in Norway.

Research limitations/implications

The paper examines the motivation for the choice of foreign entry mode from the point of view of senior managers in Norway. Future research should accommodate multiple perspectives simultaneously from the parent companies and subsidiaries in a single paper to significantly advance the field.

Practical implications

The paper discovers that the motives behind the choice of cooperative modes of entry tend to be more linked with market development, technological development while FWOS are motivated by the need to control proprietary resources. The implication for the Norwegian government is that its financial incentives do not affect the mode choice of entry.

Original/value

The paper finds that different motives and theories influence the choice of foreign market entry by SMEs in Norway and provides insights for senior managers on the factors taken into account in making choice decisions in Norway.

Details

Marketing Intelligence & Planning, vol. 30 no. 7
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 1 March 2021

Martina Battisti, Joanna Scott-Kennel and David Deakins

Integrating network attributes from studies of social networks, business relationships and small- to medium-sized enterprise (SME) internationalization, this study adopts…

Abstract

Purpose

Integrating network attributes from studies of social networks, business relationships and small- to medium-sized enterprise (SME) internationalization, this study adopts a perceptual view of a firm’s focal “net” of relationships to examine foreign market entry mode choice. This study aims to examine how the interaction between knowledge-intensive service (KIS) firm’s network ties, embeddedness and position is related to choice of mode and subsequently the firm’s perceived insidership status within its focal net.

Design/methodology/approach

This research is based on qualitative interviews with 25 small- to medium-sized KIS firms engaged in direct exporting or foreign direct investment (FDI). This study derives an empirically grounded framework of four distinct network patterns of these KIS firms through an iterative process of triangulation between cases and theory.

Findings

The four network patterns illustrate the complex interaction between network attributes and entry mode choice by KIS firms. The findings suggest formal ties and centrality in closed network relationships provide the “central controller” firm discretion over their entry mode choice. Resource-intensive FDI by “opportunistic investors” proved essential to securing centrality through formal, institutional ties. Less optimal patterns lacking institutional ties and centrality, however, precluded choice of FDI by “specialized exporters” and “client followers.” The study finds that entry modes are less likely to be influenced by the firm’s embeddedness in open or closed network relationships, but rather by the desire to achieve a more central network position and legitimacy through more formal, less imitable ties.

Research limitations/implications

The findings demonstrate the importance of network structure, a position of centrality, and strength of professional and institutional ties to small KIS firm internationalization. By adopting a more finely grained examination of the interaction between key attributes of the firm’s focal net, this study provides a valuable first step in conceptualizing the complexities associated with networking and adoption of export/investment internationalization modes.

Practical implications

There are a number of implications for the strategic and operational facets of smaller KIS firm internationalization. To avoid excessive network liability for resource-deficient SMEs, practitioners should consider network positioning as a strategic activity, with the costs associated with building and maintaining networks offset against economic- and resource-related returns.

Originality/value

The authors contribute to a better understanding of entry mode choices of KIS by taking a network perspective that accounts for the combined effects of different network attributes. The four network patterns identified extend current theoretical knowledge on the role of networks for entry mode choices of small KIS by highlighting that entry mode choices reflect the particular firm’s focal net and its attempt to achieve insidership status through high centrality and formal ties.

Details

European Journal of Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0309-0566

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Book part
Publication date: 27 November 2006

Esther Sánchez Peinado and José Pla Barber

Despite the importance of the service sector in developed economies and the growth of foreign investments in this sector during the last decade, few studies have…

Abstract

Despite the importance of the service sector in developed economies and the growth of foreign investments in this sector during the last decade, few studies have undertaken to empirically analyze the factors influencing entry mode choice. The special characteristics of the service sector increase the complexity of the analysis and, thus, traditional explanations of entry mode choice in manufacturing sectors may need to be complemented by other moderating influences. Based on 174 entry decisions of service firms, our results suggest the importance of including strategic variables and the specific nature of services to understand a complex phenomenon, which is not always associated just with efficiency and value-based considerations but also with strategic issues and industry characteristics.

Details

International Marketing Research
Type: Book
ISBN: 978-0-76231-369-3

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