Entry mode choice in China's regional distribution markets: Institution vs. transaction costs perspectives

Chen, Yung-Ray; Yang, Chyan; Hsu, Sue-Ming; Wang, Yau-De

doi:10.1016/j.indmarman.2008.02.001

Cited by 32 publications

(28 citation statements)

References 80 publications

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“…products and services) are specialized to support trade for only a few parties (Williamson, 1975). A high degree of asset specificity encourages hierarchical or high control modes (Chen, Yang, Hsu & Wang, 2009), because it increases the costs of switching from one transaction partner to another. This then leads to potential opportunistic behaviour from the export partner (Hill, 1990).…”

Section: Regardingmentioning

confidence: 99%

Financial Performance of Entry Mode Decisions: Effects of Control in an Internationalization Context

Marie

Ulrich

Boyd

et al. 2012

IJBM

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Based on a survey of 170 Danish SMEs the paper examines influences on entry mode choices and the financial outcome of these decisions. The main research objectives are divided into two steps:Step 1: To determine the factors influencing the choice of foreign entry modes by Danish companies.Step 2: To determine the relationship between the choice of entry mode and export performance, measured in terms of financial outcome. Drawing from transaction cost theory the authors develop and test a model where different factors affect the level of control chosen by the parent company. This study contributes to the existing entry mode theory by integrating both steps into a theoretical framework that offers substantive explanation of the connection between independent entry mode variables, the choice of entry mode and the resulting export performance. Personal networks and interruption of international activities were the most significant factors for the choice of intermediate modes. The results also show that high control modes can positively affect the bottom line profit through higher market investments and better implementation of cross border strategies. Finally, further research suggestions and implications are provided for companies willing to invest more into foreign markets in order to achieve a higher degree of control and better financial results.

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Section: Regardingmentioning

confidence: 99%

Financial Performance of Entry Mode Decisions: Effects of Control in an Internationalization Context

Marie

Ulrich

Boyd

et al. 2012

IJBM

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“…As timing decisions tend to be highly situationspecific (Thomas 1985), the timing of entry in a market with several rivals will reflect the competitive dynamics of the market. Competitive dynamics are conceptualized as the exchange of actions and responses between defender and attacker and are related to the likelihood and speed of a response (Chen et al 2009, Young et al 1996.…”

Section: Timing Of Entrymentioning

confidence: 99%

The race to dominate the mobile payments platform: Entry and expansion strategies

Staykova

Damsgaard

2015

Electronic Commerce Research and Applications

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“…Both negatively affect the franchisor's desired level of internationalization (Alon, 2010 ). Specifically, the transaction costs associated with managing remote locations are high as geographical distance generates costs related to communications, which in turn hinders international expansion (Chen, Yang, Hsu, & Wang, 2009). Geographical distance also raises the level of uncertainty by increasing the information gap between the franchisor and the franchisee and, therefore, the costs of monitoring and gathering information (Alon, 2006b).…”

Section: Geographical and Cultural Distancementioning

confidence: 99%

“…In sum, both geographical and cultural distance between the host and home country induce foreign enterprises to seek local support with the aim of facilitating business expansion (Chen et al, 2009). They also deter full resource commitment (direct investment) as the greater the cultural and geographical distance, the greater the environmental uncertainty and risk of foreign direct investment (Hollensen et al, 2011).…”

Section: Geographical and Cultural Distancementioning

confidence: 99%

Insights on International Franchising: Entry Mode Decision

Graciá

2013

Latin American Business Review

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Despite the substantive importance of Latin America for foreign investors, the academic attention paid to this region continues to be limited. To cover this gap, this study examines how a number of franchise chain characteristics and market conditions may have an influence on the entry options that global franchisors have when seeking to expand their business in Latin America. Results conclude that the level of a host's country uncertainty avoidance, masculinity, economic development, economic potential, corruption, and the efficiency of contract enforcement are all drivers of the entry mode. The franchisor's international experience also determines the above choice. RESUMEN.A pesar de la importancia que Latinoamérica tiene para los inversores extranjeros, todavía son escasos los trabajos académicos que han prestado atención a esta región. Para cubrir este vacío, este trabajo analiza cómo determinadas características de las cadenas franquiciadoras y del mercado receptor de la inversión pueden afectar a la forma de entrada elegida por los franquiciadores que pretendan expandir su negocio hacia Latinoamérica. Los resultados muestras que el grado de aversión al riesgo, masculinidad, desarrollo económico, potencial económico, corrupción y eficiencia en la resolución de conflictos del país receptor de la inversión determinan la forma de entrada en dicho mercado. Igualmente, la experiencia internacional de la cadena franquiciadora influye en dicha decisión. RESUMO. A pesar da importância da América Latina para os investidores estrangeiros, são ainda escasos os trabalhos académi-cos que prestaram atenção a esta região. Para preencheer este vazio, o presente trabalho analisa de que modo determinadas características das cadeias de franquias e do mercado receptor do investimento podem afetar a forma de entrada escolhida pelos franqueadores que pretendam expandir seus negócios na América Latina. Os resultados demonstram que o grau de aversão ao risco, a masculinidade, o desenvolvimento económico, potencial económico, corrupção e eficiencia na resolução de conflitos do país receptor do investimento determinam a forma de entrada nesse mercado. A experiência internacional da cadeia franqueadora influi também nessa decisão.

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Entry mode choice in China's regional distribution markets: Institution vs. transaction costs perspectives

Cited by 32 publications

References 80 publications

Financial Performance of Entry Mode Decisions: Effects of Control in an Internationalization Context

Financial Performance of Entry Mode Decisions: Effects of Control in an Internationalization Context

The race to dominate the mobile payments platform: Entry and expansion strategies

Insights on International Franchising: Entry Mode Decision

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