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A multinational firm’s expansion in a foreign market is a key issue of international business. The purpose of this study is to extend the understanding of essential drivers that will facilitate firm’s assessment of alternative modes of sequential expansion.

The study applies the knowledge-based view and explores a multinational firm’s sequential post-entry expansion in a foreign market. Event histories of Swedish industrial firms’ establishments of wholly owned subsidiaries in Germany, the UK and the USA were explored using Cox regression.

Broad market experiences stemming from corporate strategy and deep experiences from the preceding subsidiary increase the likelihood of a sequential investment. Effects of broad experiences are contingent on the context specified by the geographic scope of the firm and its general subsidiary experience.

The study contributes to international expansion theory and integrates sources of knowledge originating from strategy theory and internationalization theory. The study shows that the dual approach is needed to understand international expansion.

In evaluating a further subsidiary investment in a foreign market, the multinational firm is advised to assess whether it possesses enough market experiences to justify the investment. The experiences should be associated with corporate strategy, the previous wholly owned subsidiary and the context specifications identified in the study.

The study is unique, as it addresses the simultaneous impact of broad and deep market experiences. Also, the inclusion of central context specifications makes the study novel.

Establishment of wholly owned subsidiaries in a foreign market is central to international marketing because sole ownership and high commitment facilitate firm's marketing in the local market. Drawing on knowledge-based theory, this study extends the current understanding of firm's sequential establishments of wholly owned subsidiaries in a host country.

Swedish firms' establishments of wholly owned subsidiaries in Germany, the United Kingdom and the United States were analyzed using a longitudinal approach.

A firm's broad international experience is associated with an acquisition in any phase, while mode experience and value-adding experience are associated with postinitial acquisitions. There is no association between mode experience and greenfield investments.

Knowledge-based theory explains a firm's choice of establishment mode when establishing in the same host country. Effects of marketing experiences are due to the establishment mode and different experiences explain choices for initial and postinitial establishments.

In choosing between a wholly owned subsidiary in terms of an acquisition or a greenfield investment, for a foreign establishment the firm is advised to consider the impact of marketing experiences and establishment phase.

Research is needed on how experiences affect choices between foreign establishment modes where the firm is the sole owner. This study is the first to focus on the choice between wholly owned subsidiaries in terms of acquisitions and greenfield investments, and the impact of experience and phase of establishment in a particular host country.

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.

The purpose of this paper is to examine the impact that three sets of variables – derived from transaction cost theory (TCT), the resource‐based view (RBV), and institutional environment – have on choice of entry strategies of multinational corporations (MNCs) from an emerging market.

The sample consisted of 819 Taiwanese firms which were investigated using a national survey, and logistic regression analysis was used for testing the hypotheses.

The empirical findings confirm that the following factors affect this decision: firm‐specific assets, international experience, whether a firm is investing abroad in pursuit of a particular customer, whether a firm seeks complementary assets abroad, and the perceived institutional differences (PEDs) between a firm's home country and the host country. The findings also suggest that PEDs have a moderating effect on foreign market entry.

As MNCs from emerging markets make the decision of entry mode strategies, they must carefully consider not only the related variables in terms of TCT and the RBV, but also the influence of institutional factors in host countries.

This paper explores the modes of entry chosen by Taiwanese firms investing in China on the basis of TCT, institutional environment, and the RBV.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

The study presented in this chapter examines an increasingly important phenomenon in the internationalization of small and medium-sized enterprises (SMEs). Following technological developments, more and more SMEs are using high-commitment foreign market entry modes. These firms, called micromultinationals, have established subsidiaries in international markets despite their resource constraints. The study is an examination of a micromultinational’s development during its internationalization life-cycle regarding changes in international entry mode, organizational structure, communication, sharing of knowledge and control.

A multiple case study method has been selected for this research. Data has been collected from four Finnish micromultinationals.

The study postulates that despite smallness and youth, immediate multinationalization is possible, as is the simultaneous expansion of both geographic scope and operations. The international operation mode of the case companies has moved toward the highest-commitment entry modes during their internationalization life-cycle. The micromultinational’s globalization process takes time and continuous readjustments and development. Some of the cases have struggled with issues related to things such as communication and sharing of knowledge throughout their existence.

The results of the study suggest that any micromultinational should carefully consider their choice of investment mode (wholly owned greenfield vs. partly owned acquisition) to avoid the stagnation phase. The unlearning is difficult and with a certain path dependency, learning advantage of newness does not seem to exist even if a firm is small and relatively young.

This is the first study to examine the internal development of a micromultinational company during its internationalization life-cycle.

This study examines the determinants of performance of foreign manufacturing subsidiaries in Japan. The study finds that a foreign parent’s size, the subsidiary’s age, and a complicated distribution system influence a subsidiary’s performance. There was little significant change in these determinants over a 20-year period. However, for subsidiaries that survived over the observation period of this study, some determinants changed. We also found that by forming joint ventures with Japanese firms, foreign firms can overcome the obstacle of distribution and circumvent the disadvantage of inexperience. Moreover, the mitigating effects of joint ventures vary, depending on the type of Japanese partner.

The purpose is to extend the understanding of the resource base of the industrial firm's greenfield expansion on a foreign country market once a wholly owned subsidiary has been established.

A conceptual framework is developed relying on the resource-based theory of strategy. Resource bases in terms of value-adding activities of four Swedish industrial firms' subsidiaries in the USA are analysed. Four theoretical propositions are formulated regarding consistent associations among the activities and contingencies that are relevant to expansion on a foreign country market.

The propositions show how foreign subsidiaries' value-adding activities are aligned with two contingencies: the corporate strategy manifested by the product/market knowledge transferred from the parent firm that enable local expansion and the subsidiary's knowledge of competition barriers that obstruct local expansion. The value-adding activity may be basic or advanced and may repeat the parent firm's activity.

US subsidiaries of four Swedish industrial firms were analysed. The propositions may be turned into hypotheses suitable for tests in statistical studies. A test may include firms from different home countries and subsidiaries on different host country markets.

The conceptual framework and the propositions provide a ground for an industrial firm's decision to conduct a strategy of greenfield expansion on a foreign country market once a wholly owned subsidiary has been established.

The framework is unique and emphasizes that both knowledge stemming from corporate strategy and knowledge of local competition need to be acknowledged in order to understand firm's greenfield expansion on a foreign country market.

The aim of this study is to examine the entry mode that retail firms correctly choose when culture is simultaneously considered has a positive effect on firm performance.

This study relies on the two-step analysis originally derived from Heckman and applied into multinational enterprises (MNEs) entry mode by Shaver. To figure out the probability of entry mode in the first step, the paper uses the logit regression that independent variable is four culture dimensions and dependent variable is the entry mode (joint venture vs wholly owned subsidiary). Since the selection bias is relatively reduced by adding lambda calculated in the first step to the second step that verifies the degree of fit, the safety for interpretation of subsequent models is secured.

This study collected 96 entries of top global retail firms and found out the relationship between culturally determined entry mode and firm performance is positively significant. While existing literatures dealing with manufacturing firms' international entries showed that wholly owned subsidiary is favored over joint venture when the cultural distance is high, this study focusing on retail firms in the service sector indicates that those firms are more likely to enter the global market with joint venture. Finally, firms that appropriately understand cultural distance demonstrated higher performance in the target country.

This study focuses on the relationship between culturally determined entry mode and firm performance in the service sector, whereas extant literatures heavily depend on the one in the manufacturing sector. Moreover, the two-step analysis is exquisitely adopted to confirm the hypotheses.

There is a lack of research on how the industrial firm's international strategy is associated with basic and advanced value-adding modes of the wholly owned foreign subsidiary. The purpose of this paper is to fill the gap by answering two questions: how are relatedness between the firm and the foreign subsidiary, and the firm's international scope associated with foreign subsidiary's value-adding mode? How does the subsidiary's market experience moderate the relationships?

The study develops a conceptual model that integrates strategy theory and internationalization theory in order to explain basic value-adding modes (promotion, sales, and after-sales services), and advanced modes that also include product development and/or production. Also, the study tests the model using statistical data from subsidiaries of Swedish firms operating in Germany, the USA, and the UK.

It was found that greater relatedness between the core business unit of the parent firm and the foreign subsidiary favors a basic mode. However, the foreign subsidiary's market experience weakens the relationship, and the interaction triggers an advanced mode. Also, greater international scope of the firm favors an advanced mode.

The model test shows that research needs to consider both international strategy and market experience in explaining value-adding modes of an industrial firm's wholly owned subsidiary.

By using the study contributions the industrial firm's efforts to efficiently implement international strategy would become more efficient as strategy coherence will increase.

This paper contributes to literature on international strategy and internationalization by showing that international strategy and market experience of foreign markets mutually impact value-adding modes of wholly owned foreign subsidiaries.