International Entry Modes by New Ventures

Abstract

Entry mode refers to the mechanism through which firms enter a foreign market. The existing literature of international entrepreneurship has identified determinants of entry modes by new ventures at various levels. The main country‐level determinants of international entry mode include host country risk, host market potential, and government intervention and bargaining power. Firm‐level determinants include international experience on prior entry mode choices, asset specificity, innovation orientation and capability, market specific knowledge, appropriability of knowledge assets, product nature, and network relationships with suppliers and customers. Individual‐level determinants of entry modes are somewhat unique to the entrepreneurship literature; prior research has emphasized the role of entrepreneurs' and managers' personal biases, perceptions of risks, and prior experience in new ventures' choices of entry modes. While significant progress has been made over the last two decades, our understanding of international entry modes by new ventures is still limited; several future research avenues are suggested.