The choice of entry mode in sequential foreign direct investment

Strategic Management Journal

Volumn 22, Issue 8, 2001, Pages 747-776

  Chang, Sea Jin ^a   Rosenzweig, Philip M ^b,c  

^a Korea University   (South Korea)

^b IMD   (Switzerland)

^c IMD Chemin de Bellerive 23 ^*  (Switzerland)

Author keywords

Foreign direct investment; Foreign entry; Knowledge based perspective; Mode of entry; Sequential investment

Indexed keywords

EID: 0001402375     PISSN: 01432095     EISSN: None     Source Type: Journal    
DOI: 10.1002/smj.168     Document Type: Article

References (73)

1. Agarwal S, Ramaswami S. 1992. Choice of foreign entry mode: impact of ownership, location, and internalization factors. Journal of International Business Studies 23: 1-27.
2. Amburgey T, Miner AS. 1992. Strategic momentum: the effects of repetitive, positional, and contextual momentum on merger activities. Strategic Management Journal 13(5): 335-348.
3. Anderson E, Gatignon H. 1986. Modes of foreign entry: a transaction cost analysis and proposition. Journal of International Business Studies 17: 1-16.
4. Barkema H, Vermeulen F. 1998. International expansion through start-up or acquisition: a learning perspective. Academy of Management Journal 41: 7-26.
5. Buckley P, Casson M. 1976. The Future of the Multinational Enterprise. Homles & Meier: New York.
6. Bureau of Economic Analysis. 1985. Foreign Direct Investment in the United States: 1982 Benchmark Survey. U.S. Department of Commerce: Washington, DC.
7. Caves R, Mehra S. 1986. Entry of foreign multinationals into U.S. manufacturing industries. In Competition in Global Industries, Porter M (ed.). Harvard Business School Press: Boston, MA; 449-481.
8. Chang SJ. 1995. International expansion strategy of Japanese firms: capability building through sequential entry. Academy of Management Journal 38(2): 383-407.
9. Cho KR, Radmanabhan R. 1995. Acquisition versus new venture: the choice of foreign establishment mode by Japanese firms. Journal of International Management 1(3): 255-285.
10. Contractor F. 1990. Contractual and cooperative forms of international business: toward a unified theory of modal choice. Management International Review 30: 31-54.
11. Cyert R, March J. 1963. A Behavioral Theory of the Firm. Prentice-Hall: Englewood Cliffs, NJ.
12. Davidson W. 1980. The location of foreign direct investment activity: country characteristics and experience effect. Journal of International Business Studies 11: 9-22.
13. Davidson W, McFetridge D. 1984. International technology transactions and the theory of the firm. Journal of Industrial Economics 332(3): 253-264.
14. Davidson W, McFetridge D. 1985. Key characteristics in the choice of international technology transfer. Journal of International Business Studies 16: 5-21.
15. Davies S, Lyons B, Matraves C, Rondi L. 1996. Industrial Organization in the European Union. Oxford University Press: New York.
16. Doz Y, Prahalad CK. 1991. Managing DMNCs: a search for a new paradigm. Strategic Management Journal Summer Special Issue 12: 145-164.
17. Dunning J. 1988. Explaining International Production. Unwin Hyman: London.
18. Erramilli L. 1991. The experience factor in foreign market entry behavior of service firms. Journal of International Business Studies 22: 479-501.
19. Flowers E. 1976. Oligopolistic reaction in European and Canadian direct investment in the United States. Journal of International Business Studies 7: 43-55.
20. Franko LG. 1976. The European Multinationals. Greylock: Stamford, CT.
21. Gatignon H, Anderson E. 1988. The multinational corporation's degree of control over foreign subsidiaries: an empirical test of a transaction cost explanation. Journal of Law, Economics and Organization 4: 304-336.
22. Gomes-Casseres B. 1989. Ownership structures of foreign subsidiaries. Journal of Economic Behavior and Organization 11: 1-25.
23. Graham E. 1978. Transatlantic investment by multinational firms: a rivalistic phenomenon? Journal of Post-Keynesian Economics 1: 82-99.
24. Greene W. 1993. Econometric Analysis, 3rd edn. Prentice-Hall: Englewood Cliffs, NJ.
25. Gulati R. 1995. Does familiarity breed trust? Academy of Management Journal 38: 85-112.
26. Hausman J, McFadden D. 1984. Specification tests for the multinomial logit model. Econometrica 52(5): 1219-1240.
27. Hennart J-F. 1982. The Theory of the Multinational Enterprise. University of Michigan Press: Ann Arbor, MI.
28. Hennart J-F. 1991. The transaction costs theory of joint ventures: an empirical study of Japanese subsidiaries in the United States. Management Science 37(4): 483-497.
29. Hennart J-F, Park Y. 1993. Greenfield vs. acquisition: the strategy of Japanese investors in the United States. Management Science 39(9): 1054-1070.
30. Hennart J-F, Reddy S. 1997. The choice between mergers/acquisitions and joint ventures: the case of Japanese investors in the United States. Strategic Management Journal 18(1): 1-12.
31. Hill C, Hwang P, Kim WC. 1990. An eclectic theory of the choice of international entry mode. Strategic Management Journal 11(2): 117-128.
32. Hisey K, Caves R. 1985. Diversification strategy and the choice of country: diversifying acquisition abroad by U.S. multinationals. Journal of International Business Studies 16: 51-64.
33. Hofstede G. 1980. Culture's Consequence: International Differences in Work-related Values. Sage: Beverly Hills, CA.
34. Hsiao C. 1986 Analysis of Panel Data. Cambridge University Press: New York.
35. Hymer S. 1960. The International Operations of National Firms: A Study of Direct Foreign Investment. MIT Press: Cambridge, MA.
36. Johanson J, Vahlne J. 1977. The internationalization process of the firm; a model of knowledge development and increasing foreign market commitment. Journal of International Business Studies 8: 23-32.
37. Kim WC, Hwang P. 1992. Global strategy and multinationals' entry mode choice. Journal of International Business Studies 23: 29-53.
38. Klecka W. 1980. Discriminant Analysis. Sage: Beverly Hills, CA.
39. Knickerbocker F. 1973. Oligopolistic Reaction and Multinational Enterprise. Harvard Business School Press: Boston, MA.
40. Kobrin S. 1991. An empirical analysis of the determinants of global integration. Strategic Management Journal, Summer Special Issue 12: 17-31.
41. Kogut B. 1983. Foreign direct investment as a sequential process. In The Multinational Corporation in the 1980s, Kindleberger CP, Audretsch D (eds). MIT Press: Cambridge, MA; 38-56.
42. Kogut B. 1991. Joint ventures and the option to expand and acquire. Management Science 37(1): 19-33.
43. Kogut B, Chang SJ. 1991. Technological capabilities and Japanese foreign direct investment in the United States. Review of Economics and Statistics 73: 401-413.
44. Kogut B, Chang SJ. 1996. Platform investment and volatile exchange rate. Review of Economics and Statistics 78: 221-231.
45. Kogut B, Singh H. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies 19: 414-432.
46. Kogut B, Zander U. 1996. What do firms do? Coordination, identity, and learning. Organization Science 7: 502-518.
47. Liang K, Zeger S. 1986. Longitudinal data analysis using generalized linear models. Biometrika 73(1): 13-22.
48. Madhok A. 1997. Cost, value, and foreign market entry mode: the transaction and the firm. Strategic Management Journal 18(1): 39-61.
49. March JG. 1991. Exploration and exploitation in organizational learning. Organization Science 2(1): 71-87.
50. McClain D. 1983. Foreign direct investment in the United States: old currents, 'new waves' and the theory of direct foreign investment. In The Multinational Corporations of the 1980s, Kindleberger C, Audretsch D (eds). MIT Press: Cambridge, MA; 278-333.
51. McFadden D. 1974. Conditional logit analysis of qualitative choice behavior. In Frontiers in Econometrics, Zaremka P (ed.). Academy Press: New York: 105-142.
52. Miller D, Friesen P. 1980. Momentum and revolution in organizational adaptation. Academy of Management Journal 4: 591-614.
53. Penner-Hahn J. 1998. Firm and environmental influences on the mode and sequence of foreign research and development activities. Strategic Management Journal 19(2): 149-168.
54. Prahalad CK, Hamel G. 1990. The core competence of the corporation. Harvard Business Review 68(3): 79-91.
55. Pugel T. 1985. The Industry Determinants of Foreign Direct Investment into the United States. Division of Research, Graduate School of Business Administration, New York University.
56. Ronen S, Shenkar O. 1985. Clustering countries on attitudinal dimensions: a review and synthesis. Academy of Management Review 10: 435-454.
57. Root F. 1994. Entry Strategies for International Markets. Lexington: New York.
58. Rugman A. 1981. Inside the Multinationals: The Economies of Internal Markets. Croom Helm: London.
59. Scott J. 1993. Purposive Diversification and Economic Performance. Cambridge University Press: New York.
60. Stata. 1999. Stata Reference Manual. Stata Press: College Station, TX.
61. Stopford J, Haberich K. 1978. Ownership and control of foreign operation. In European Research in International Business, Ghertman M, Leontiades J (eds). North-Holland: Amsterdam: 141-167.
62. Szulanski G. 1996. Exploring internal stickiness: impediments to the transfer of best practice within the firm. Strategic Management Journal, Winter Special Issue 17: 27-43.
63. Teece D, Pisano G, Shuen A. 1997. Firm capabilities, resources and the concept of strategy. Strategic Management Journal 18(7): 509-533.
64. Terpstra V, Yu C. 1988. Determinants of foreign investment of U.S. advertising agencies. Journal of International Business Studies 19: 33-46.
65. Vernon R. 1966. International investment and international trade in the product life cycle. Quarterly Journal of Economics 80: 190-207.
66. Westney E. 1988. Domestic and foreign learning curve in managing international cooperative strategies. In Cooperative Strategies in International Business, Contractor F, Lorange P (eds). Lexington Books: Lexington, MA; 339-346.
67. Wilson BD. 1980. The propensity of multinationals to expand through acquisitions. Journal of International Business Studies 11: 59-65.
68. Yoshida M. 1987. Japanese Direct Investment in the United States. Praeger: New York.
69. Yu C. 1990. The experience effect and foreign direct investment. Weltwirtschaftliches Archiv 126: 560-579.
70. Yu C, Ito K. 1988. Oligopolistic reaction and foreign direct investment: the case of the U.S. tire and textile industry. Journal of International Business Studies 19: 449-460.
71. Zaheer S. 1995. Overcoming the liability of foreignness. Academy of Management Journal 38: 341-363.
72. Zander U, Kogut B. 1995. Knowledge and the speed of transfer and imitation of organizational capabilities. Organization Science 6: 76-92.
73. Zejan J. 1990. New ventures or acquisitions: the choice of Swedish multinational enterprises. Journal of Industrial Economics 38(3): 349-355.