SMEs entry mode decision making process: Rational or cybernetic?

Entry mode choice is a critical decision when a firm expends its business to foreign markets. By applying rational and cybernetic strategies to international strategic decision-making process, this paper investigates how small and medium sized firms (SMEs) decision makers decide their entry mode choices. By focusing on the entry decision making process, this research distinguishes the prior entry mode studies that emphasize the relationship between influencing factors and their impacts on entry mode choices. The results of this study show that SME managers normally adapt a combination of rational and cybernetic strategies in their international entry decision making process. This highlights that SMEs’ international entry decision making process is dynamic and complex

SMEs entry mode decision making process: Rational or cybernetic?

Entry mode choice is a critical decision when a firm expends its business to foreign markets. By applying rational and cybernetic strategies to international strategic decision-making process, this paper investigates how small and medium sized firms (SMEs) decision makers decide their entry mode choices. By focusing on the entry decision making process, this research distinguishes the prior entry mode studies that emphasize the relationship between influencing factors and their impacts on entry mode choices. The results of this study show that SME managers normally adapt a combination of rational and cybernetic strategies in their international entry decision making process. This highlights that SMEs’ international entry decision making process is dynamic and complex

Entry Mode Choice of Multinational Banks

When expanding abroad, a multinational bank faces a trade-off between accessing a foreign country via cross border lending or a financial foreign direct investment, i.e. greenfield or acquisition entry. We analyze the entry mode choice of multinational banks and explicitly derive the entry mode pattern in the banking industry. Moreover, we show that in less developed banking markets, a trend towards cross border lending and acquisition entry exists. Greenfield entry prevails in more developed markets. Furthermore, we identify a tendency towards acquisition entry in small and towards greenfield entry in larger host countries

Ownership strategies in post-financial crisis Southeast Asia: The case of Japanese firms

Existing research on entry mode determinants is firmly grounded in the transaction cost and resource-based literature while location-and institution-specific characteristics lack attention. The primary goal of this article is to address the determinants of entry mode by Japanese manufacturing firms in Southeast Asia after the financial crisis on the basis of a theoretical framework that integrates firm-specific, industry-specific, location-and institution-specific factors. Results show that locational factors make significant contributions to the understanding of the entry mode selection of MNEs and partly override the effect of firm-specific factors. --entry mode,transaction costs,resource commitment,location factors,country risk,Japanese manufacturing firms,Southeast Asia

Entry Mode Choice of Multinational Banks

When expanding abroad, a multinational bank faces a trade-off between accessing a foreign country via cross border lending or a financial foreign direct investment, i.e. greenfield or acquisition entry. We analyze the entry mode choice of multinational banks and explicitly derive the entry mode pattern in the banking industry. Moreover, we show that in less developed banking markets, a trend towards cross border lending and acquisition entry exists. Greenfield entry prevails in more developed markets. Furthermore, we identify a tendency towards acquisition entry in small and towards greenfield entry in larger host countries.foreign bank entry; multinational bank; cross border lending; greenfield entry; acquisition entry

Antecedents and consequences of effectuation and causation in the international new venture creation process

The selection of the entry mode in an international market is of key importance for the venture. A process-based perspective on entry mode selection can add to the International Business and International Entrepreneurship literature. Framing the international market entry as an entrepreneurial process, this paper analyzes the antecedents and consequences of causation and effectuation in the entry mode selection. For the analysis, regression-based techniques were used on a sample of 65 gazelles. The results indicate that experienced entrepreneurs tend to apply effectuation rather than causation, while uncertainty does not have a systematic influence. Entrepreneurs using causation-based international new venture creation processes tend to engage in export-type entry modes, while effectuation-based international new venture creation processes do not predetermine the entry mod

Analyzing Modes of Foreign Entry

This paper studies the entry decision of a multinational enterprise into a foreign market. Two alternative entry modes for a foreign direct investment are considered: Greenfield investment versus acquisition. In contrast to existing approaches, the acquisition price and the profits under both entry modes are endogenously determined. Interestingly, we find that the optimal entry mode decision is a ected by the competition intensity in the market in a non-monotonic way. When markets are very much or very little competitive, greenfield investment is the optimal entry mode, while for intermediate values it is acquisition

Foreign markets entry mode decision for SMEs. Key factors and role of industrial districts.

The principal aim of this paper was to examine the internationalization of small and medium-sized enterprises (SMEs) in regard to the entry mode selection process. To successfully accomplish this, a resource-based view model was used to investigate the primary factors influencing a SMEs’ international entry mode. Data was obtained during direct interviews with owners/managers of SMEs in Italy. The results revealed that entry mode decisions were primarily influenced by firm specific factors, above all organizational culture. The study also illustrated that SMEs were not influenced by their belonging to an industrial district.Small and medium sized enterprises; Resource based view; Entry modes; Industrial Districts

Lusophone-African SME internationalization: a case for born global and international joint ventures

This study investigates the internationalization strategies of Lusophone Africa multinational enterprises (MNEs) from Angola and Mozambique, more specifically their entry mode. Information was gathered through a survey of 29 MNEs upper management respondents and subsequent face-to-face semi-structured interviews with 24 of them in their countries. The results suggest that most MNEs opted for equity-based investment strategies, mainly joint venture and mergers and acquisitions (M&A) as their preferred mode of entry when internationalizing. A significant group of them opted for e-commerce/e-business strategies and direct and indirect exports. A smaller portion of the interviewees chose Greenfield investment as a mode of entry. Many of these MNEs could be classified as born global/international new venture (INV). Finally, this study presents a conceptual framework for use in studying the entry mode choice of enterprises from Lusophone Africa frontier markets and presents research propositions for better understanding the determinants of entry mode strategies of enterprise from Angola and Mozambique.https://doi.org/10.1080/15475778.2019.1634406Accepted manuscriptPublished versio

Technological leadership and foreign investors'choice of entry mode

Developing country governments tend to favor joint ventures over other forms of foreign direct investment, believing that local participation facilitates the transfer of technology, and marketing skills. The author assesses joint ventures'potential for such transfers by comparing the characteristics of foreign investors engaged in joint ventures with those of foreign investors engaged in wholly owned projects in transition economies in the early 1990s. Unlike the existing literature, the author focuses on intra-industry differences rather than inter-industry differences in research and development, and advertising intensity. Empirical analysis shows that foreign investors who are technological, or marketing leaders in their industries, are more likely to invest in wholly owned projects than to share ownership. This is true in high- and medium-technology sectors, but not in industries with low research and development spending. The author concludes that it is inappropriate to treat industries as homogeneous in investigating modes of investment. She also suggests that in sectors with high research and development spending, joint ventures may present less potential for transfer of technology, and marketing techniques than wholly owned subsidiaries.Public Health Promotion,International Terrorism&Counterterrorism,Health Monitoring&Evaluation,Water and Industry,Banks&Banking Reform,International Terrorism&Counterterrorism,Health Monitoring&Evaluation,Water and Industry,Banks&Banking Reform,Agricultural Knowledge&Information Systems