Decades of research on market entry modes: What do we really know about external antecedents of entry mode choice?

The choice of a mode of market entry is a critical component of the internationalization strategy, and numerous empirical studies have focused on this topic. Prior research, however, has provided mixed empirical evidence and thus, is difficult to interpret and review.This study examines the external antecedents of the choice of entry mode by meta-analyzing data from 72 independent primary studies. We focus on the decision between wholly owned subsidiaries and cooperative entry modes. For each variable, hypotheses about the theoretically expected direction of effect are posited and tested.We find a strong positive relationship between power distance as a cultural trait of the firm's home country and the propensity to establish a wholly owned subsidiary. On the other hand, we find a negative association between country risk, legal restrictions, market growth, and market size and the preference for wholly owned subsidiaries. We extensively discuss the implications of the meta-analytical results and investigate moderating effects of industry type and the time of the study. The relationship between income level of the host country and entry mode depends, to some degree, on the industry type. Service companies exhibit a negative relationship between income level and wholly owned subsidiaries, while manufacturing companies show a positive relationship.     

Build–operate–transfer (BOT): an emerging entry mode for service offshoring

Build–operate–transfer (BOT) is a well-established solution used in the engineering and construction industries for building different types of infrastructure (e.g. railways, highways, power plants). In recent years, BOT has increasingly been adopted by companies in the service industry as a mode for entering foreign markets. BOT in service offshoring (SO) is characterised by a number of significant peculiarities (e.g. different numbers of involved parties, fee methods, lengths of the concession period), which may call into question the possibility of extending existing findings that relate to infrastructure projects. The aims of this work are as follows: to collect and systematise existing knowledge on engineering and construction BOT projects; to highlight – through an exploratory case study – how these results could be applied to BOT in SO; and to shed light on the factors affecting the choice between different entry modes (including BOT).