Order of entry and performance of multinational corporations in an emerging market : a contingent resource perspective

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

47 Citations (Scopus)

Abstract

Drawing on the resource-based view, this study examines the contingency effects of industry- and firm-level variables on the first-mover advantages and effective follower strategies in an emerging-market context. Using hierarchical regressions, the authors analyze a large data set of foreign investors in China. Contingency models that include the interactions of entry order with the moderating variables have better fit of the data than the main-effect models. Industry growth and competition, firm size, entry mode, resource commitment, and marketing intensity have significant moderating effects on first-mover advantages. After the authors correct for multicollinearity bias using ridge regression, it seems that pioneers still enjoy a small advantage in market share but not in profitability, indicating a trade-off between the two. Furthermore, followers may augment performance by increasing resource commitment and marketing intensity. These findings have significant implications for entry-order strategies and for improving foreign direct investment performance in foreign markets; they also suggest meaningful directions for further research.
Original languageEnglish
Pages (from-to)28-56
Number of pages29
JournalJournal of International Marketing
Volume13
Issue number4
DOIs
Publication statusPublished - 1 Dec 2005

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First-mover advantage
Resources
Marketing
Industry
Emerging markets
Multinational corporations
Order of entry
Resource commitment
Follower
Foreign investors
Investment performance
Moderating variables
Contingency
Profitability
Resource-based view
Trade-offs
Foreign direct investment
Pioneers
Hierarchical regression
Firm size

Cite this

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title = "Order of entry and performance of multinational corporations in an emerging market : a contingent resource perspective",
abstract = "Drawing on the resource-based view, this study examines the contingency effects of industry- and firm-level variables on the first-mover advantages and effective follower strategies in an emerging-market context. Using hierarchical regressions, the authors analyze a large data set of foreign investors in China. Contingency models that include the interactions of entry order with the moderating variables have better fit of the data than the main-effect models. Industry growth and competition, firm size, entry mode, resource commitment, and marketing intensity have significant moderating effects on first-mover advantages. After the authors correct for multicollinearity bias using ridge regression, it seems that pioneers still enjoy a small advantage in market share but not in profitability, indicating a trade-off between the two. Furthermore, followers may augment performance by increasing resource commitment and marketing intensity. These findings have significant implications for entry-order strategies and for improving foreign direct investment performance in foreign markets; they also suggest meaningful directions for further research.",
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Order of entry and performance of multinational corporations in an emerging market : a contingent resource perspective. / CUI, Geng; LUI, Hon Kwong.

In: Journal of International Marketing, Vol. 13, No. 4, 01.12.2005, p. 28-56.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

TY - JOUR

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AB - Drawing on the resource-based view, this study examines the contingency effects of industry- and firm-level variables on the first-mover advantages and effective follower strategies in an emerging-market context. Using hierarchical regressions, the authors analyze a large data set of foreign investors in China. Contingency models that include the interactions of entry order with the moderating variables have better fit of the data than the main-effect models. Industry growth and competition, firm size, entry mode, resource commitment, and marketing intensity have significant moderating effects on first-mover advantages. After the authors correct for multicollinearity bias using ridge regression, it seems that pioneers still enjoy a small advantage in market share but not in profitability, indicating a trade-off between the two. Furthermore, followers may augment performance by increasing resource commitment and marketing intensity. These findings have significant implications for entry-order strategies and for improving foreign direct investment performance in foreign markets; they also suggest meaningful directions for further research.

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