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

Marie, Anna; Ulrich, Dyhr; Boyd, Britta; Hollensen, Svend

doi:10.5539/ijbm.v7n24p12

Cited by 12 publications

(19 citation statements)

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“…As already highlighted the Danish economy depends to a large extent on exporting, but research on internationalisation or entry mode choice is scarce (Madsen and Servais, 1997;Servais and Moller Jensen, 2001). Only a few studies have examined which factors influence the Danish SMEs choice of entry mode (Hollensen et al, 2011;Dyhr Ulrich et al, 2012). But no study has focused on how Danish family and non-family businesses internationalise and which internal factors influence their entry mode choice.…”

Section: Introductionmentioning

confidence: 99%

Market entry strategies into the BRIC countries - a comparison of Danish family and non-family businesses

Boyd

Ulrich

2014

IJGSB

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Based on a sample of 177 exporting SMEs, this study investigates what market entry strategy is used by Danish family and non-family businesses. From a resource-based view, three critical internal factors (risk, flexibility and control) affecting the entry mode choice into the BRIC markets are analysed. The effective management of firms' resources and capabilities is influenced by the perception of these internal factors when expanding into foreign markets. Our results confirmed that family firms build up longer lasting relationships in the host country by choosing high commitment entry modes compared to non-family firms. Furthermore, the Danish exporters regarded China as being the most established of the four BRIC markets which could be seen in their willingness to use high control entry modes in China. Finally, non-family firms are more concerned about higher flexibility and lower control when entering the BRIC markets. In contrast, family firms choose high commitment entry modes which involve high risk and low flexibility when entering the BRIC markets. Further implications discuss the suitability of export strategies to BRIC markets for managers of Danish family and non-family firms.

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Section: Introductionmentioning

confidence: 99%

Market entry strategies into the BRIC countries - a comparison of Danish family and non-family businesses

Boyd

Ulrich

2014

IJGSB

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“…En effet, il est envisageable que la maison mère s'appuie sur l'expatriation comme modalité de coordination des activités dans les premiers stades de la création de la filiale étrangère (Fang et al, 2010). Par ailleurs, de futures recherches pourraient s'attacher à évaluer la performance des filiales de PME en fonction du mode d'entrée retenu, et de déterminer l'influence du risque pays et la distance culturelle perçue sur la base des résultats financiers obtenus (Dyhr Ulrich et al, 2012). Dans le contexte de PME danoises, un haut degré de contrôle sur l'investissement réalisé permet d'optimiser la performance financière de la filiale étrangère (Dyhr Ulrich et al, 2012).…”

Section: Resultsunclassified

“…Par ailleurs, de futures recherches pourraient s'attacher à évaluer la performance des filiales de PME en fonction du mode d'entrée retenu, et de déterminer l'influence du risque pays et la distance culturelle perçue sur la base des résultats financiers obtenus (Dyhr Ulrich et al, 2012). Dans le contexte de PME danoises, un haut degré de contrôle sur l'investissement réalisé permet d'optimiser la performance financière de la filiale étrangère (Dyhr Ulrich et al, 2012). Au-delà des critères financiers objectifs, il serait à cet égard envisageable de se tourner vers la perception de la performance en évaluant le degré de satisfaction de la maison mère vis à vis des objectifs pour lesquels la filiale étrangère a été créée (Geringer et Hebert, 1991;Child et Yan, 2003).…”

Section: Resultsunclassified

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L’influence du risque pays et de la distance culturelle sur les modes de présence et de contrôle des PME à l’étranger

Jean-Amans

Abdellatif

2014

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Cette recherche vise à analyser l’influence du risque pays et de la distance culturelle sur les modes de présence et de contrôle des PME sur leurs filiales. Deux variables relatives à la stratégie d’implantation à l’étranger ont été retenues : le type d’implantation (filiale détenue à 100 % ou coentreprise internationale) et les pratiques d’expatriation. Pour conduire cette étude, une enquête en ligne a été menée par le biais d’une base de données entièrement élaborée et constituée de 2526 PME françaises implantées à l’étranger sous la forme de filiales. Notre contribution montre que le risque pays et la distance culturelle sont associés à la forme de la filiale implantée à l’étranger, mais n’influencent pas les pratiques d’expatriation mobilisées.This research aims to analyze the influence of country risk and cultural distance on entry mode and control of SMEs over their subsidiaries. Two variables reflecting the entry mode were used : type of implantation (wholly-owned subsidiaries and international joint venture) and expatriation practices. To carry out this study, an online survey was conducted through a database constructed by ourselves and consists of 2526 French SMEs located abroad as subsidiaries. Our contribution shows that the country risk and cultural distance associated with the form of the subsidiary located abroad, but do not influence practices of expatriation.Esta investigación tiene como objetivo analizar la influencia del riesgo país y la distancia cultural en los modos de presencia y control de las PYME en sus filiales. Se utilizaron dos variables relacionadas con la estrategia de implantación en el exterior : el tipo de implantación (filial al 100 % y la empresa conjunta internacional) y las prácticas de expatriación. Para llevar a cabo este estudio, una encuesta en línea se realizó a través de una base de datos que hemos totalmente desarrollado y se compone de 2.526 pymes francesas radicadas en el extranjero en forma de filiales. Nuestra contribución demuestra que el riesgo país y la distancia cultural son asociados a la forma de la filial en el extranjero, pero no influyen en las prácticas de expatriación movilizados

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“…Entry mode can be defined as an institutional arrangement that would have a significant influence on firms' decision-making in the future [49]. Each enterprise could choose the entry mode such as export, joint venture, strategic alliance, WOS (wholly-owned subsidiary), M&A (merger & acquisition), and other access options to conduct international activities [46,50]. Firstly, Export is one of the most important entry modes for companies to expand their business and market bases to another country in order to gain more opportunities and achieve better performance [51][52][53][54][55].…”

Section: The Entry Mode Of the International Expansionmentioning

confidence: 99%

The Paths of Internationalization of Chinese Innovative Firms

Wang

2020

Sustainability

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Innovative enterprises from emerging markets, such as China, are a group of understudied enterprises, which could generate new and important views on internationalization. Some unique characteristics of Chinese innovative enterprises are creating new ideas that help to a better understanding of entry mode choice, market location choice, and entry speed in the paths of internationalization. Drawing on an unbalanced panel of Chinese innovative enterprises’ outward foreign direct investment (OFDI) event data, we analyzed the tendency of the paths of internationalization of Chinese innovative enterprises and the determining factors that influence the Chinese innovative enterprises’ choice in entry mode, market location, and entry speed. The results show that: (1) Chinese innovative enterprises are more likely to choose developing countries than developed countries. (2) When these firms conduct investment activities in developed countries, the probability rank (from high to low) of entry mode choice is acquisition, along with the wholly-owned subsidiary, exporting and joint venture. When these firms expand the business in developing countries, the entry mode of export is most likely to be chosen and the acquisition is least likely to be chosen. (3) This tendency and paths choice of internationalization in entry mode, market location and entry speed are influenced by the international experience, the multidimensional proximity, psychic distance, internationalization motivation, ownership structure, and innovation ability. Finally, we discuss these contributions and make some suggestions for future research.

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

Cited by 12 publications

References 74 publications

Market entry strategies into the BRIC countries - a comparison of Danish family and non-family businesses

Market entry strategies into the BRIC countries - a comparison of Danish family and non-family businesses

L’influence du risque pays et de la distance culturelle sur les modes de présence et de contrôle des PME à l’étranger

The Paths of Internationalization of Chinese Innovative Firms

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