China and India are the fastest growing major markets in the world and the most popular markets for foreign entrants. Yet no study has examined the success or failure of these entries. Using a new definition of success and a uniquely compiled archival database, the authors analyze whether and why firms that entered China and India succeeded or failed. The most important findings are rather counter-intuitive: smaller firms are more successful than larger firms, and greater openness of the emerging market have lower success. Other findings are that success is higher with earlier entry, greater control of entry mode, and shorter cultural and economic distance between the home and host nations. Importantly, with or without control for these drivers, success in India is lower than that in China. The authors discuss the reasons for and implications of these findings.
To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.