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This paper formalises the choice a firm has to face when entering a foreign market via FDI as between setting up an entirely new plant (greenfield investment) or acquiring an existing indigenous firm. We assume the existence of an asymmetric duopoly in the host country, and these duopolists face the entry of a technologically advanced foreign firm in the market. The analysis shows how different constellations of entry costs and the post‐entry competition affect the foreign firm’s entry mode choice. Simulation results show that the foreign entrant will in most cases be best off by acquiring an existing indigenous high‐technology firm, thus, forming a duopoly with an indigenous low‐technology firm. We also discuss briefly the strategic dimension to the model, where the foreign firm has the possibility of crowding out the indigenous incumbents through lowering the price.

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.

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.

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.

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.

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.

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.

This paper aims to provide a wide picture of studies on heuristics for international decision-making with a focus on foreign market entry. This paper systematically reviews studies published in the international business and international marketing domain to examine heuristically based decisions for foreign market entry.

This paper proposes a systematic literature review and an in-depth analysis of 32 papers published between 1997 and 2021 dealing with foreign market entry and the use of heuristics for international decision-making.

Even if the marketing and management literature is in many ways permeable to the debate around heuristics developed in experimental psychology and cognitive science, international business and international marketing studies on the one hand recognize that international decision-making, especially when dealing with foreign market entry, is strongly characterized by uncertainty, on the other hand, there isn’t a developed and systematized literature about it. This paper shows key topics and areas fundamental to foreign market entry in which heuristics are applied by decision makers and their effectiveness.

A systematic review of the use of heuristics for foreign market entry decision-making can represent a useful step for a more organic development of knowledge about the more general use of heuristics for international decision-making. Understanding the decision-making process on the modes of entry in foreign markets is a key topic for international marketing and international business scholars and practitioners.

The purpose of this study is to examine the relationship between foreign market entry modes and hard‐ and soft‐service firms. The paper investigated which foreign market entry modes service firms opt for, and if this is influenced by systematic differences between types of service industries. A secondary purpose is to test the generalizability of the research findings from manufacturing sector to service sector firms.

Our sample consisted of 140 Swedish service firms. These firms were investigated using a mailed questionnaire survey, and logistic regression analysis was used for testing the hypotheses.

The statistical analysis shows that, in general, soft‐service firms are much more likely than hard service firms to choose a high control entry mode over a low control entry mode. Furthermore, as cultural distance increases, the likelihood of this choice increases even more.

The implications are that while hard service suppliers can learn from the experience of manufacturing firms going abroad, soft services are unique. Given the importance for soft‐service suppliers to interact with their foreign customers, they should opt for a high degree of control over their foreign market entry mode. In future research on foreign market entry mode selection in service firms more attention should be given to social processes that exercise control.

The findings enhance knowledge on foreign market entry by service firms.

By bringing together the IB and IE literatures, the purpose of this paper is to examine the internationalization process as an entrepreneurial process related to the development of international opportunities. It explicitly connects different types of knowledge (i.e. market and internationalization), international opportunities and the internationalization process comprising both new foreign market entry and sequential moves that happen after entry.

This is a conceptual paper that reviews the literature on knowledge, opportunities and the internationalization process. Moreover, the paper identifies the current gaps in the literature and builds new theory that sheds light into how these three concepts are related. The paper also presents a model and propositions that should guide future research.

The proposed model shows that market and internationalization knowledge combine to form the international knowledge stockpile of the firm, which moderates the relationship between the development of international opportunities and the internationalization process, comprising not only new foreign market entry but also sequential moves that happen after entry using either mode continuation or modal shift. Moreover, it shows that the development of opportunities only leads to modal shifts after a certain threshold is achieved.

The propositions suggest that market and internationalization knowledge are positively related to international opportunities, which, in turn, are related to foreign market entry and sequential moves using mode continuation. International opportunities, however, are related to modal shifts only beyond a threshold. Moreover, the international knowledge stockpile of the firm moderates the relationship between international opportunities and the internationalization process. Because this is a conceptual paper, the propositions have not been tested and, therefore, lack empirical validation. Nonetheless, the model is a starting point to new research on internationalization distinguishing different types of knowledge as well as different sequential moves.

This study shows that the internationalization process is contingent on the different types of knowledge associated with it. It also introduces the idea of a threshold that shapes the internationalization process. The bulk of the research on internationalization suggests that such a process is gradual and incremental. This study offers a non-linear alternative.

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.

Few researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing models ignore the role of serendipity in the opportunity discovery process. The authors provide a nuanced view on international opportunities by developing the role of serendipitous opportunities in the foreign market entry process. The authors develop a model integrating the notions of serendipity, entrepreneurial logic, experiential knowledge and network knowledge redundancy. From the study’s model, the authors condense three sets of hypotheses on the relationships among experiential knowledge and entry strategy, network knowledge redundancy, entry strategy and serendipity.

The authors confront the study’s hypotheses with data collected on-site at 168 Swedish firms covering 234 opportunities, and to test the hypotheses, the authors ran ordinary least squares (OLS) regression tests in three steps.

The results of the study’s analysis reveal that experiential knowledge and network knowledge redundancy both lead to a logic based on rigid planning and systematic search, which in turn reduces the likelihood that serendipitous opportunities will be realized in the foreign market entry process.

This is the first study that develops a measure of opportunities that are the outcome of serendipitous events. In addition, the authors integrate network and learning theories and internationalization theory by establishing antecedents to, and outcomes of, the entry strategy.

The purpose of this paper is to provide a theory‐based framework that informs a fashion retailer's entry mode choice into a foreign market.

Aspects of transaction cost, bargaining, resource based, and internationalization theories were integrated to develop a conceptual framework for fashion retailers determining the best entry mode to foreign markets. Propositions were developed, which serve as bridge laws, bridging the gap between the theories and the investigation of fashion retailers' entry mode choice. A case study was used to demonstrate applicability of the developed propositions.

Three groups of factors were identified that influence entry mode choice in the fashion retail market: firm‐specific factors of asset specificity, brand equity, financial capacity, and international experience; country‐specific factors of country risk, cultural distance, and government restrictions; and market‐specific factors of market potential and market competition. Nine propositions were generated, positing how each of the factors may influence a fashion retailer's entry mode choice.

The conceptual model and propositions require further empirical investigation. Future research also needs to systematically explore the interactions or trade‐offs between different determinate factors.

A fashion retailer can use the framework and propositions to systematically evaluate the company's case to justify an entry mode decision for a specific foreign market.

This is the first paper to describe the integration of theories to help explain factors affecting fashion retailers' entry mode choice.

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.

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.

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.

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.

This study examines what motivates firms to go and remain abroad despite uncertain profit potential. In a departure from probing traditional market-seeking, profit-driven motives, the authors explore how domestically driven, sociocultural motivations may shape the foreign market entry decisions of Korean commercial banks (KCBs). The authors argue that, due to the power imbalance between KCBs and their chaebol clients within the historical and cultural contexts of their relationships, KCBs' foreign market entries may depend more on their clients' presence in these markets than on their profit potential.

The authors focus on the foreign market entries of KCBs and their client firms. Using the data of 8 KCBs and their client firms belonging to the 60 business groups (chaebols) of Korea, the authors analyze 6,577 observations involving the dyadic relationship between a KCB and its client firm in 15 host countries from 2005 to 2014.

The authors find that the number of clients' subsidiaries operating in foreign markets may increase the likelihood of KCBs entering these markets. Moreover, when KCBs earn more domestic profit from client firms, the potential Korean market in the host country is greater, and the institutional distance between the host country and Korea is smaller.

In addition to the critical role of a bank-centered financing system in advancing a developing country and its firms, the authors’ findings suggest that firms should pay attention to the local diaspora and the institutional distance between the host and home countries in order to manage power-imbalanced relationships and make them sustainable.

The study contributes to the literature on foreign market entry by demonstrating how the home country's sociocultural factors may worsen the power imbalance, thereby pushing firms to make seemingly irrational decisions to go and stay abroad. That is, KCBs' foreign operations may be a way of seeking relational benefits with client firms, which would serve as a source of long-term domestic market profits. The authors’ findings thus highlight the need to consider how sociocultural factors may also shape firms' decision-making in their international business.