Entry mode irreversibility, host market uncertainty, and foreign subsidiary exits

Future orientation and foreign entry mode choice in the internationalization of professional service firms

The purpose of this study is to examine the future orientation dimension of national culture on the choice of foreign entry mode in the context of the internationalization of Australian law firms. Our findings indicate short-term orientation for the firms’ choice of entry mode to international markets, with top-tier firms preferring joint venture arrangements, while both mid-tier law firms and boutique law firms prefer ‘fly-in, fly-out’ methods of internationalization. Our study provides guidance for scholars and managers seeking to examine and reflect on firm internationalization, particularly the future orientation dimension and market entry strategies.

Capability, environment and internationalization fit, and financial and marketing performance of MNEs’ foreign subsidiaries

Purpose

Extant work in international business (IB) involves a partial contingency-theoretic perspective: a holistic view of the impact of bundles of contingencies on an outcome variable is missing. The purpose of this paper is to adopt a contingency approach to study multinational enterprise (MNE) subsidiary performance in the appropriate context of European transition economies at the beginning of the current millennium.

Design/methodology/approach

Methodologically, the authors introduce abduction as a line of inquiry into IB and management to develop new theoretical insights, and apply the novel empirical general interaction method to estimate bundle effects. In so doing, the authors contribute to the further development of a theoretical and empirical toolkit to revitalize holistic, or configurational, quantitative research in IB and management.

Findings

The authors find that capability fit is a necessary condition for high MNE subsidiary marketing performance, whilst environment fit is particularly critical for high MNE subsidiary financial performance.

Research limitations/implications

A key limitation is that this is a cross-section study.

Practical implications

This study offers insights as to subsidiary fit into Eastern Europe, indicating fitting entry and establishment modes.

Originality/value

This paper offers a novel holistic approach to IB, both in terms of theoretical and empirical methodology.