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Global strategy and multinationals' entry mode choice

Author: Kim, W. Chan ; Hwang, PeterINSEAD Area: StrategyIn: Journal of International Business Studies, vol. 23, 1st quarter 1992 Language: EnglishDescription: p. 29-53.Type of document: INSEAD ArticleNote: Please ask the Library for this articleAbstract: This paper makes a case directed towards establishing the importance of global strategic considerations in choosing multinationals' entry mode. Specifically, the paper contends that beyond the environmental and transaction specific factors well established in the literature to affect the entry mode decision, the strategic relationship a multinational envisages between its operation across borders in reaching this decision is also considered. After incorporating various global strategic variables into an eclectic framework of the factors influencing the entry mode choice, the paper tests both the validity of the overall framework and the importance of each entry mode determinant in differentiating among entry modes. This is done based on 96 multinational managers' responses to a survey questionnaire concerning their entry mode decision experiences. The results suggest that an express incorporation of global strategic variables into an analysis of the entry mode decision is warranted
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This paper makes a case directed towards establishing the importance of global strategic considerations in choosing multinationals' entry mode. Specifically, the paper contends that beyond the environmental and transaction specific factors well established in the literature to affect the entry mode decision, the strategic relationship a multinational envisages between its operation across borders in reaching this decision is also considered. After incorporating various global strategic variables into an eclectic framework of the factors influencing the entry mode choice, the paper tests both the validity of the overall framework and the importance of each entry mode determinant in differentiating among entry modes. This is done based on 96 multinational managers' responses to a survey questionnaire concerning their entry mode decision experiences. The results suggest that an express incorporation of global strategic variables into an analysis of the entry mode decision is warranted

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