The choice of entry mode in sequential foreign direct investment

Chang, Sea‐Jin; Rosenzweig, Philip M.

doi:10.1002/smj.168

Cited by 537 publications

(477 citation statements)

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“…This categorization assumes that the different methods represent a continuum of control, commitment and risk, which implies differences in their effectiveness in actually transferring resources and capabilities (Anderson & Gatignon, 1986, Jones & Young, 2009 (Dunning, 1979, and1980); the approach based on networks (Johanson & Matson, 1987); gradualist approaches Vahlne, 1977, and1990) or, more recently, company capability-based models with a theoretical basis in RBV theory (Madhok, 1997;Peng & Wang, 2000;Chang & Rosenzweig, 2001). Originally formalized in 1991 as a rather static list of ingredients for competitive advantage, RBV has evolved into a dynamic recipe explaining how to use the ingredients .…”

Section: The Influence Of Marketing Capabilities On Entry Mode Choicementioning

confidence: 99%

International new ventures as “small multinationals”: The importance of marketing capabilities

Ripollés

Blesa

2012

Journal of World Business

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This paper aims to explore how marketing capabilities contribute to the international expansion of international new ventures, and the influence of these capabilities on the entry mode these firms choose. Specifically, the study examines how marketing This study extends previous international entrepreneurship research, including insights on antecedents of international new ventures' choice of higher commitment entry modes in foreign markets. Additionally, the results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of marketing capabilities as an antecedent to higher commitment entry modes.

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Section: The Influence Of Marketing Capabilities On Entry Mode Choicementioning

confidence: 99%

International new ventures as “small multinationals”: The importance of marketing capabilities

Ripollés

Blesa

2012

Journal of World Business

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“…A firm with greater international experience prior to its entry into a foreign market is likely to have experienced more diverse opportunities that allow it to learn how to deal with local idiosyncratic requirements and how to maintain control and coordination within a network of culturally different and geographically dispersed foreign subsidiaries (Chang and Rosenzweig, 2001;Zahra, Ireland, and Hitt, 2000). As a result, such learning allows the firm to develop a more comprehensive set of routines that can relieve the time and attention of headquarters managers in managing foreign operations and can accelerate the development of local personnel's ability in coordinating within the multinational network.…”

Section: International Expansion and The Penrose Effectmentioning

confidence: 99%

The dynamics of Japanese firm growth in U.S. Industries: The Penrose effect

Tan

Mahoney

2007

MANAGE. INT. REV.

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This research paper explores the conditions under which a firm is more/less likely to incur the Penrose Effect when expanding in a foreign market. We posit that multinational firms that can accelerate the development of new managerial resources in their foreign operations have greater organizational capabilities to adjust their managerial resources timely in the process of expansion, and thus will be less vulnerable to a severe managerial constraint on the rate of growth. In contrast, factors that impede the development of new managerial resources in foreign operations will prevent multinational firms from growing fast in consecutive time periods. Based on a longitudinal sample of Japanese manufacturing entries in the United States, our empirical results indicate that Japanese firms were able to achieve growth in consecutive time periods when these firms sent more expatriates to the foreign operations at the time of entry, and when these Japanese firms had greater home experience prior to their entry into the U.S. market. On the other hand, Japanese firms were found to be less able to achieve growth in consecutive time periods when a high level of uncertainty characterized the U.S. markets that these Japanese firms entered. AbstractThis research paper explores the conditions under which a firm is more/less likely to incur the Penrose Effect when expanding in a foreign market. We posit that multinational firms that can accelerate the development of new managerial resources in their foreign operations have greater organizational capabilities to adjust their managerial resources timely in the process of expansion, and thus will be less vulnerable to a severe managerial constraint on the rate of growth. In contrast, factors that impede the development of new managerial resources in foreign operations will prevent multinational firms from growing fast in consecutive time periods. Based on a longitudinal sample of Japanese manufacturing entries in the United States, our empirical results indicate that Japanese firms were able to achieve growth in consecutive time periods when these firms sent more expatriates to the foreign operations at the time of entry, and when these Japanese firms had greater home experience prior to their entry into the U.S. market. On the other hand, Japanese firms were found to be less able to achieve growth in consecutive time periods when a high level of uncertainty characterized the U.S. markets that these Japanese firms entered.

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“…Although not addressed in this paper, choice of entry mode is a critical issue for firms that enter foreign markets, and a large body of literature addressing this topic has emerged in the international business field. (See Chang and Rosenzweig, 2001 for a recent survey.) Foreign entrants often bring technological or marketing skills, but lack key resources relating to the foreign market.…”

Section: Discussionmentioning

confidence: 99%