Using a sample of 770 foreign market entries in the time period 2005-2015 we examine whether the entry mode strategies chosen by SMEs are different from those of large firms. Our findings reveal that when compared to large firms, SMEs tend to rely more on cooperative entry modes. More specifically, SMEs prefer equity joint venture rather than wholly owned subsidiary. Using a propensity score matching approach to avoid sample bias issues, our results show that the choice between joint venture and wholly owned subsidiary is strongly influenced by the size of the investing firm and by their financial resources, while the family ownership structure is not a significant discriminant. We discuss the theoretical underpinnings of our findings along with the managerial implications emerged from this research.

The choice between joint venture and wholly owned subsidiary: a comparison of SMEs and large firms / Sestu Maria, Cristina; Majocchi, Antonio; D’Angelo, Alfredo. - International Business in a Transforming World – the Changing Role of States and Firms, (2018), pp. 1-18. (European International Business Academy 2018, Poznan,  December, 13th–15th, 2018).

The choice between joint venture and wholly owned subsidiary: a comparison of SMEs and large firms

Majocchi Antonio;
2018

Abstract

Using a sample of 770 foreign market entries in the time period 2005-2015 we examine whether the entry mode strategies chosen by SMEs are different from those of large firms. Our findings reveal that when compared to large firms, SMEs tend to rely more on cooperative entry modes. More specifically, SMEs prefer equity joint venture rather than wholly owned subsidiary. Using a propensity score matching approach to avoid sample bias issues, our results show that the choice between joint venture and wholly owned subsidiary is strongly influenced by the size of the investing firm and by their financial resources, while the family ownership structure is not a significant discriminant. We discuss the theoretical underpinnings of our findings along with the managerial implications emerged from this research.
978-83-952955-0-8
Entry Modes, Joint Venture, Wholly Owned Subsidiary, SMEs
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/196780
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