Title: Market entry mode and performance: capability alignment and institutional moderation

Authors: Tobias Pehrsson

Addresses: Centre for Innovation, Entrepreneurship and Learning Research, Halmstad University, Box 823, S-30118 Halmstad, Sweden

Abstract: The selection of mode of entering a foreign market is a key decision in a firm's internationalisation. Building on the resource-based view, this study examines important antecedents of firm's selection of a wholly-owned subsidiary and collaboration with other firms. Based on analysis of empirical data from Swedish manufacturing firms operating on several foreign markets the study found that: 1) greater market orientation (MO) and entrepreneurial orientation (EO) capabilities favour firm's selection of a wholly-owned subsidiary; 2) greater institutional distance between the domestic market and the foreign market favours collaboration with local firms; 3) an entry mode that is aligned with the capabilities and institutional distance is positively associated with firm's performance on the foreign market after the entry phase. Contributions to literature are discussed.

Keywords: market entry mode; market orientation; entrepreneurial orientation; institutional theory; post-entry performance; international business; capabilities; capability alignment; institutional moderation; entrepreneurship; resource-based view; RBV; Sweden; manufacturing industry; wholly-owned subsidiaries; domestic markets; collaboration; local firms; firm performance; foreign markets.

DOI: 10.1504/IJBG.2015.072521

International Journal of Business and Globalisation, 2015 Vol.15 No.4, pp.508 - 527

Received: 19 Sep 2014
Accepted: 28 Jan 2015
Published online: 16 Oct 2015 *

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