Determinants of Entry Mode Decision: A Discussion on Firm-specific and Country-specific Factors
Luo, Weiwei (2013) Determinants of Entry Mode Decision: A Discussion on Firm-specific and Country-specific Factors. [Dissertation (University of Nottingham only)] (Unpublished)
In today’s dynamic global economy and competitive environment, it is crucially important for firms to expand their production and services in multiple markets. As many firms attempts to develop and sustain competitive advantages, it has academic and practical value to examine the decision of entry mode choice. This dissertation aims to investigate the determinants of multinational enterprises’ entry mode choice in emerging economics by using China as our empirical setting. Based on four main leading theories regarding to entry mode decision, we narrow down the set of previously-claimed entry mode determinants into two groups—firm-specific and country-specific factors. We then build hypotheses regarding each of the five factors and run an econometrics test basing on data of year 1996. In order to compensate the limitations of quantitative research and generate a more solid conclusion on the determinants of entry mode, we also conduct a qualitative analysis on these factors. The main conclusions of our research are: (1) Both firm-specific and country-specific factors have impacts on multinational enterprises’ entry mode choice; (2) Of all five observed factors, “regional risks and incentive regulations” has the greatest influence, followed by psychic distance, degree of technology intensive, duration of project and the amount of foreign invested capital. This research has important implications not only for research but also for international managers.
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