Session 35

Entry Modes, Exit and Outcomes

Track G

Date: Monday, October 8, 2012


Time: 16:30 – 17:45


Room: Meeting Room 2.2

Session Chair:

  • Asli Musaoglu Arikan, Kent State University

Title: Agglomeration, Entry and the Liability of Foreignness


  • Anna Lamin, Northeastern University
  • Grigorios Livanis, Northeastern University

Abstract: Foreign entrants suffer from a liability of foreignness, influencing their location choices and leading them to prefer clusters with other firms. However, prior research only examines foreign entrants, while the liability of foreignness implies that these entrants would be more strongly attracted to clusters of firms than domestic firms. We compare the location choices of 437 foreign and domestic entrants in India during 2005-2009 and find that domestic firms exhibit a stronger preference than foreign ones for these city clusters. This suggests that foreign entrants may not suffer from a liability of foreignness, anymore so than domestic entrants.

Title: Beyond Entry: The Diffusion of Multilocational Firms


  • Ariel Casarin, Adolfo Ibañez University
  • Maria Eugenia Delfino, Austral University

Abstract: This paper examines alternative experiential knowledge factors that determine the geographic and temporal diffusion of a multilocational firm once it has entered a new foreign market. To that aim it uses survival analysis techniques to examine the factors that explain where and when the firm establishes in a particular local market. Results indicate that, at initial stages, political experience and geographical aggregation drive firm expansion. They also show that, once consolidated in the host market, the diffusion of the firm is driven almost exclusively by its knowledge of the country’s local markets. The findings are central to the multilocational firm, as the diversified structure of its location-specific assets becomes a source of its competitive advantage.

Title: Foreign Knowledge Seeking and Country Exit


  • Aseem Kaul, University of Minnesota
  • Ram Ranganathan, University of Texas at Austin
  • Heather Berry, George Washington University

Abstract: We extend work on multinational knowledge seeking by examining the joint effect of firm and country factors on a firm’s decision to exit from a foreign country. We argue that in order to tap into foreign innovation multinationals must possess strong technological capabilities as well as the willingness and ability to maintain a long-term multinational presence. Firms with these characteristics are more likely to maintain a foreign presence, especially where there is a strong fit between firm and country knowledge. Results from a panel of US multinationals show that firms with strong technological capabilities are less likely to exit foreign countries, especially if they have strong CEO incentives and abundant financial resources. Consistent with our theory, these effects are stronger in high knowledge fit countries.

Title: Knowing When to Leave the Party: What Factors Contribute to Market Exit


  • Naomi Gardberg, City University of New York
  • Mehmet Genc, Ozyegin University
  • William Newburry, Florida International University

Abstract: Market entry decisions are a central focus of the FDI literature, and studies regarding why firms enter particular markets abound in the strategy field. However, international expansion is not always successful and even may be detrimental to firm performance. Indeed, failure rates for international investments have been estimated at between 30 and 70%, depending upon the industry and other factors. Nonetheless, despite this high failure rate, knowledge of the antecedents of market exit is relatively weak, particularly in non-manufacturing. Herein we examine the antecedents of foreign market exit among the world's largest 200 retailers from 1997-2003. Our longitudinal dataset includes retailers from 21 home countries invested in 140 host countries. Using multi-level models, we find multiple theories contribute to explaining 143 exits over 7 years.

All Sessions in Track G...

Sun: 08:00 – 09:15
Session 129: Strategy Implementation: Global Challenges
Sun: 09:30 – 10:45
Session 130: Practicing Strategy in Transition Economies: Reframing, Rethinking and Renewing
Sun: 11:15 – 12:30
Session 131: Global Strategies in the Service Sector
Sun: 15:15 – 16:30
Session 29: Strategy and Outsourcing
Mon: 08:00 – 09:15
Session 32: The Dynamics of Internationalization
Mon: 09:30 – 10:45
Session 34: Emerging Market/Advanced Market Strategic Interactions
Mon: 13:30 – 14:45
Session 33: Internationalization, Diversification & Performance
Mon: 16:30 – 17:45
Session 35: Entry Modes, Exit and Outcomes
Session 39: Global Strategies
Tue: 08:00 – 09:15
Session 37: Subsidiary Strategy
Tue: 11:00 – 12:15
Session 41: International M&A as an Entry Mode Strategy
Tue: 14:15 – 15:30
Session 30: Politics, Institutions, Political Risk & Global Strategy
Tue: 15:45 – 17:00
Session 40: Knowledge, Innovation and Global Strategy
Session 42: A Q&A with Pilsner Urquell: Strategy from a Small Nation
Tue: 17:30 – 18:45
Session 38: Global Managers and Managing Globally

Strategic Management Society