Multinational Firms' Sequential Entry Strategies

This dissertation, "Multinational Firms' Sequential Entry Strategies" by Yong, Gerald, Gao, 高勇, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Abstract of thesis entitled Multinational Firms' Sequential Entry Strategies Submitted by Gerald Yong Gao for the Degree of Doctor of Philosophy at The University of Hong Kong in May, 2006 With multinational firms' increasing commitments to the global market in the last several decades, research on foreign market entry and investment has attracted much attention in the field of international marketing/business. A large volume of conceptual and empirical work has examined the determinants of entry mode choices, the timing of entries, and the performance implication of entry timing and mode choices. Most of previous studies only focused on firms' one-time entry. Evidently, multinational firms often engage in a series of entries over time in key foreign markets. The purpose of this thesis is to contribute to the emerging research stream of sequential entry activities and provide more insights on the dynamic process of multinational firms' market entry behaviors. This thesis focuses on sequential entry strategies of multinational firms. It consists of three studies each addressing a subtopic. In the first study, I examine sequential entry mode choices of multinational firms. Previous studies suggest that firms tend to adopt the same entry mode that they have used before. Meanwhile, some studies also propose that firms tend to switch entry modes over time. Taking the organizational learning perspective, I examine the influences of firms' learning from their own entry experience, competitors' entry experience, and their own international experience. I found that firms have the tendency of adopting the same mode used previously, but they will also switch to a higher commitment mode when they have accumulated more entry experience. The IIfindings provide new insights on the evolution of firms' entry mode choices in a foreign market. In the second study, I examine the pacing of multinational firms' sequential entry activities in foreign markets, i.e., how fast firms undertake a series of entries over time. I propose that the pacing of sequential entries is influenced by firms' learning in foreign markets and market attractiveness. Furthermore, I examine the process of multinational firms' within-market expansion and investigate how firms' learning enables them to conquer the constraints of expansion. The empirical results provide supportive evidence for the predictions. In the third study, I examine the effect of organizational learning on multinational firms' subsidiary performance. I develop different profiles of experience at firm level including general entry experience, entry specific experience, and exporting experience, and examine whether experience accumulation contributes to subsidiary performance. Furthermore, I also investigate the performance implication of learning at subsidiary level of multinational firms. I found that firms' general entry experience has no effect on the financial performance of subsidiaries. On the contrary, entry specific experience, exporting experience, and subsidiary experience exhibit positive effects on subsidiary performance. The empirical results also provide supporting evidence that the effect of exporting experience will get weaker as firms accumulate more entry specific experience. II