ISSN: 2520-4750 (Online), 2521-3040 (Print)

The Impact of Entry Mode Choice on Performance of Firms through Innovation and External Business Network

 Author (s)

Eleny Tadele and Zhou Xiaoyan

Abstract

This research empirically examines the mediating effect of innovation and external business network on the association between firm’s entry mode decision and performance. The research employed firm level panel data of 2,824 foreign firms who have an investment in the top ten FDI recipient African countries over the period of 1996-2018. This data is obtained from World Bank Enterprise Survey Indicators (ESI).  Findings showed that, firm innovation positively mediate the relationship between high share and wholly owned types of entry mode and performance. While low share of ownership has no mediation effect between the two variables. The result indicates that, firms with high and full ownership have limited risk of opportunistic behavior of their partners than firms with shared ownership Whereas, external business network positively mediate the association between firms with low shares of ownership and performance. This result show when firm’s share the ownership with local partners the linkage attached to the local partner would be shared to them and enhance their network with customers, suppliers, R&D institutes and other actors of host country external business environment. Therefore, Multinational firms should give special emphasis to their entry mode decisions when they enter a new market. This research gives a practical knowledge for multinational firms on the importance of their entry mode decision to enhance their innovation, business network as well as performance.

Keywords: Entry mode, Performance, Firm Innovation, External Business network, Host country, Home country.

 

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Title:The Impact of Entry Mode Choice on Performance of Firms through Innovation and External Business Network
Author:Eleny Tadele and Zhou Xiaoyan
Journal Name:International Journal of Science and Business
Website:ijsab.com
ISSN:ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)
DOI:https://10.5281/zenodo.7039979
Media:Online
Volume:16
Issue:1
Issue publication (Year):2022
Acceptance Date:31/08/2022
Date of Publication:01/09/2022
PDF URL:https://ijsab.com/wp-content/uploads/978.pdf
Free download:Available
Page:108-120
First Page:108
Last Page:120
Paper Type:Research paper
Current Status:Published

 

Cite This Article:

Eleny Tadele and Zhou Xiaoyan (2022). ‘The Impact of Entry Mode Choice on Performance of Firms through Innovation and External Business Network’. International Journal of Science and Business, 16(1), 108-120. doi: https://doi.org/ 10.5281/zenodo.7039979

Retrieved from https://ijsab.com/wp-content/uploads/978.pdf

 

About Author (s)

Eleny Tadele (corresponding author), Department of Business Administration, School of Business and Economics, Beijing University of International Business and Economics (UIBE), Chaoyang District Beijing, P.R. China 100029.

 Zhou Xiaoyan, : Department of Business Administration, School of Business, Beijing University of International Business and Economics (UIBE), Beijing, China.

 

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DOI: https://doi.org/10.5281/zenodo.7039979

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