Abstract
In this study, we propose and test a hierarchical model of market entry modes. Entry modes can first be viewed as equity-based versus non-equity-based. Within equity-based modes, the choice is between wholly owned operations and equity joint ventures, while within non-equity-based modes, the choice is between contractual agreements and export. Empirically, we demonstrate that there are factors that exert substantial influences at the equity versus non-equity level, but rather weak influences at the lower level of choice hierarchy. The empirical results are based on a sample of over 10,000 foreign entry activities into China between 1979 to 1998. The findings provide supportive evidence for the hierarchical model of market entry modes.
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*Yigang Pan (Ph.D., Columbia University) is Scotiabank Professor of International Business, Schulich School of Business, York University, Toronto, Canada and the School of Business, University of Hong Kong (2000-2002).
**David K. Tse (Ph.D., UC Berkeley) is Professor of International Marketing and Director of Chinese Management Center at the University of Hong Kong.
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Pan, Y., Tse, D. The Hierarchical Model of Market Entry Modes. J Int Bus Stud 31, 535–554 (2000). https://doi.org/10.1057/palgrave.jibs.8490921
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DOI: https://doi.org/10.1057/palgrave.jibs.8490921