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HomeInsightsExamining market entry mode strategies

Examining market entry mode strategies

Abstract
This research has two major purposes. The first is to develop and test a framework for market entry mode choice drawing on the resource-based theory and institutional theory in the context of region-within-country from marketing perspective. On this issue resource-based influences and environment influences are key drivers of entry mode strategies. Specifically, the central proposition is that a firm selects market entry strategies that its resources (firm characteristics, product characteristics, and firm size) can support and this selection also depends on the firms’ perception of two environments (home market characteristics and host market characteristics). The second is to test the theoretical framework within the special situation of Hong Kong firms’ entry modes into Mainland China as a specific economic region-within-country context. A mail survey was used to gather data from 208 senior executives of Hong Kong firms undertaken. The results show that firm characteristics, product characteristics, home market characteristics, and host market characteristics (but not firm size) significantly influence the choice of equity mode entry mode strategies for firms from Hong Kong entering other economic zones within Mainland China.

Highlights
► Entry mode strategies in a region-within-country economy (Hong Kong and China).
► Firm characteristics and product characteristics support equity-entry mode choice.
► Firm size does not matter in entry mode choice.
► Dynamic home and host market characteristics support equity-entry mode choice.
► Firms with equity-entry modes outperform firms with non-equity-entry modes.

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