Entry Mode Decisions by Emerging-Market Firms Investing in Developed Markets Academic Article uri icon

abstract

  • This study draws upon the interorganizational imitation theory and endorsement literatures to explain the entry mode decisions of emerging-market firms (EMFs) into developed markets. Specifically, the study argues that EMFs entering developed markets pay differential attention to the prior actions of reference groups - by type of country of origin (whom to follow?) and by entry mode (how to imitate?). We test our hypotheses with a sample of 591 entries by EMFs investing in the United States over a 10-year period. The results support an isomorphism-based framework with different influences across reference groups by country of origin and entry mode. We find a dominant form of isomorphism, even after controlling for transaction costs and resource-based explanations. Copyright © 2012 by Emerald Group Publishing Limited All rights of reproduction in any form reserved.

author list (cited authors)

  • Li, D., Miller, S. R., & Eden, L.

citation count

  • 9

publication date

  • January 2012