Choice of Market Entry Mode is Contingent on Environment: Integrating the Resource Dependence and Contingency Theory Perspectives Samia Tariq

Choice of Market Entry Mode is Contingent on Environment: Integrating the Resource Dependence and Contingency Theory Perspectives

Author (s)

Samia Tariq

Abstract

Selection of the appropriate entry mode for internationalization is a crucial decision. Global firms contemplating foreign direct investment may incur huge costs due to wrong selection of entry mode. Environment, as a non-controllable factor, should guide these firms to choose a pertinent entry mode. This conceptual paper provides key propositions of the potential impact of entry mode selection on the success of the firm, building on resource dependency theory and contingency theory. The study proposes that the choice of entry mode selection by internationalizing Chinese firms, targeting developing as well as developed economies, is contingent on the level of environmental uncertainty and risk profile of the host country. The study highlights significant environmental factors as prime determinants of the selection of an entry mode. The proposed framework can serve as a guideline for global firms to choose the host market depending on the nature of environmental factors. Choosing right entry mode will help them to reduce failures arising from the wrong choice of entry mode. Future empirical studies should test the framework to add to the international business literature.

Key words: Resource dependence theory (RDT), Outward Foreign Direct Investment (OFDI), Emerging Market Multinational Companies (EMNCs), Mergers & Acquisitions (M&As), Greenfield Investments, Joint Ventures (JVs).

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Title: Choice of Market Entry Mode is Contingent on Environment: Integrating the Resource Dependence and Contingency Theory Perspectives
Author: Samia Tariq
Journal Name: International Journal of Science and Business
Website: ijsab.com
ISSN: ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)
DOI: https://doi.org/10.5281/zenodo.3415347
Media: Online
Volume: 3
Issue: 5
Acceptance Date: 15/09/2019
Date of Publication: 16/09/2019
PDF URL: http://ijsab.com/wp-content/uploads/400.pdf
Free download: Available
Page: 173-182
First Page: 173
Last Page: 182
Paper Type: Review Paper
Current Status: Published

Cite This Article:

Samia Tariq (2019). Choice of Market Entry Mode is Contingent on Environment: Integrating the Resource Dependence and Contingency Theory Perspectives, International Journal of Science and Business, 3(5), 173-182. doi: https://doi.org/10.5281/zenodo.3415347

Retrieved from http://ijsab.com/wp-content/uploads/400.pdf

 

About Author (s)

Samia Tariq, PhD Scholar, Business School, University of International Business and Economics (UIBE), Beijing, China.

 

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DOI: https://doi.org/10.5281/zenodo.3415347

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