CHOICEOFFOREIGNMARKETENTRYMODEIMPACTOFOWNERSHIP.docVIP

CHOICE OF FOREIGN MARKET ENTRY MODE: IMPACT OF OWNERSHIP, LOCATION AND INTERNALIZATION FACTORS (By: Agarwal, Sanjeev, Ramaswami, Sridhar N., Journal of International Business Studies, 1992 1st Quarter, Vol. 23, Issue 1) **不包含表格 **compiled by 陽光 Abstract. Firms interested in servicing foreign markets face a difficult decision with regards to the choice of an entry mode. The options available to a firm include exporting, licensing, joint venture and sole venture. Several factors that determine the choice of a specific foreign market entry mode have been identified in previous literature. These factors can be classified into three categories: ownership advantages of a firm, location advantages of a market, and internalization advantages of integrating transactions. This study examines the independent and joint influences of these factors on the choice of an entry mode. Multinomial logistic regression model is employed to test the hypothesized effects. INTRODUCTION A firm seeking to enter a foreign market must make an important strategic decision on which entry mode to use for that market. The four most common modes of foreign market entry are exporting,( n1) licensing, joint venture, and sole venture. Because all of these modes involve resource commitments (albeit at varying levels), firms initial choices of a particular mode are difficult to change without considerable loss of time and money [Root 1987]. Entry mode selection is therefore, a very important, if not a critical, strategic decision. Previous studies in the areas of international trade, industrial organization, and market imperfections have identified a number of factors that influence the choice of an entry mode for a selected target market. Integrating perspectives from these areas, Dunning [1977,1980,1988] proposed a comprehensive framework, which stipulated that the choice of an entry mode for a target market is influenced by three types of determinant factors: ownership advantages of a fi