Scholars (e.g., Burgel & Murray, 2000; Jones, 1999; Zacharakis, 1997) have suggested that small and medium–sized enterprise (SME) international entry mode selection is an important new research area. In this study we attempt to determine if a model of large firm entry mode selection can be applied to SME entry mode choice. Using Dunning's eclectic framework, we examined SME entry into Central and Eastern Europe (CEE). We found that Dunning's eclectic framework did a good job of predicting SME entry mode selection in CEE markets. Managerial implications and suggestions for future research are discussed.
Get full access to this article
View all access options for this article.
References
1.
AcsZ. & AudretschD. (1990).Innovation and small firms. Cambridge: MIT Press.
2.
AgarwalS. & RamaswamiS. (1992).Choice of foreign market entry mode: Impact of ownership, location and internalization factors.Journal of International Business Studies, 23, 1–27.
3.
AndersenO. (1997).Internationalization and market entry mode: A review of theories and conceptual frameworks.Management International Review, 37(2), 27–42.
4.
AndersonE. & GatignonH. (1986).Modes of foreign entry: A transaction cost analysis and propositions.Journal of International Business Studies, 17, 1–26.
5.
BrouthersK.D., BrouthersL.E. & WernerS. (1996).Dunning's eclectic theory and the smaller firm: The impact of ownership and locational advantages on the choice of entry mode in the computer software industry, International Business Review, 5, 377–394.
6.
BrouthersL.E., BrouthersK.D. & WernerS. (1999).Is Dunning's eclectic framework descriptive or normative?Journal of International Business Studies, 30, 831–844.
7.
BurgelO. & MurrayG.C. (2000).The international market entry choices of start–up companies in high–technology industries.Journal of International Marketing, 8, 33–62.
8.
ContractorF.J. (1984).Choosing between direct investment and licenses: Theoretical considerations and empirical tests.Journal of International Business Studies, Winter, 167–188.
9.
CovielloN. & MunroH. (1997).Network relationships and the internationalisation process of small software firms.International Business Review, 6, 361–386.
10.
CovinJ.G. & SlevinD.P. (1991).A conceptual model of entrepreneurship as firm behavior.Entrepreneurship Theory and Practice, V. 16, No. 1, 7–25.
11.
CrickD. & JonesM.V. (2000).Small high–technology firms and international high–technology markets.Journal of International Marketing, 8, 63–85.
12.
DunningJ. (1988).The eclectic paradigm of international production: A restatement and some possible extensions.Journal of International Business Studies, 19, 1–31.
13.
DunningJ. (1993).Multinational Enterprises and the Global Economy. Reading, MA: Addison–Wesley Publishing Company.
14.
EllisP. & PecotichA. (2001).Social factors influencing export initiation in small and medium–sized enterprises. Journal of Marketing Research, 38, 119–130.
15.
ErramilliM.K. & D'SouzaD.E. (1993).Venturing into foreign markets: The case of small service firms. Entrepreneurship Theory and Practice, V. 17, No. 4, 29–41.
16.
ErramilliM.K. & RaoC.P. (1993). Service firms’ international entry–mode choice: A modified transaction–cost analysis approach.Journal of Marketing, 57, 19–38.
17.
ErramilliM.K., AgarwalS. & KimS. (1997).Are firm–specific advantages location–specific too?Journal of International Business Studies, 28, 735–757.
18.
Financial Times (1998). Greece Survey, Special Section, December 8.
19.
GankemaH.G., SnuitH.R. & Van DijkenK.A. (1997).The internationalisation process of small and medium sized enterprises: An evaluation of the stage theory. In R. Donckells & A. Mitettinen (eds.)Entrepreneurship and SME Research: On its Way to the Next Millenium, 185–197. Aldershopt: Ashgate Publishing.
20.
HennartJ.F. (1997).Binomial logistic models, transaction costs, and joint ventures: A methodological note. In M. Ghertman, J. Obadia, & J.L. Arregle (eds.)Statistical Models for Strategic Management. Boston: Kluwer Academic Publishers.
21.
HopeK. (1996).Busy in the Balkans: Greek businesses take leading role.Europe, 353, 10–11.
22.
JohansonJ. & VahlneJ. (1977).The Internationalization process of knowledge development and increasing foreign market commitments.Journal of International Business Studies, 8, 11–24.
23.
JohnG. & WeitzB. (1988).Forward integration into distribution: Empirical test of transaction analysis.Journal of Law, Economics, and Organization, 4, 119–126.
24.
JonesM. (1999).The internationalization of small high–technology firms.Journal of International Marketing, 7, 15–41.
25.
IkechiE. & SivakumarK. (1998).Foreign market entry mode choice of service firms: A contingency perspective.Academy of Marketing Science, 26, 274–292.
26.
KleinS., FrazierG.L. & RothV.J. (1990).A transaction cost analysis model of channel integration in international markets.Journal of Marketing Research, 27, 196–208.
27.
KogutB. & SinghH. (1988).The effect of national culture on the choice of entry mode.Journal of International Business Studies, 19, 411–432.
28.
KwonY.C. & KonopaL.J. (1993).Impact of host country market characteristics on the choice of foreign market entry mode.International Marketing Review, 10, 60–76.
29.
LeonidouL., KatsikeasC. & PiercyN. (1998).Identifying managerial influences on exporting: Past research and future directions.Journal of International Marketing, 6, 74–102.
30.
LouriH., PanastasiouM. & LanourisJ. (2000).FDI in the EU periphery: A multinomial logit analysis of Greek firm strategies.Regional Studies, 34, 419–427.
31.
LuJ. & BeamishP. (2001).The internationalization and performance of SMEs.Strategic Management Journal, 22, 565–586.
32.
MarinovM. & MarinovaS. (1999).Foreign investor strategy development in the central and eastern European context.Thunderbird International Business Review, 41, 107–130.
33.
McDougallP.P. & OviattB.M. (1996).New venture internationalization, strategic change, and performance: a follow up study.Journal of Business Venturing, 11, 23–40.
34.
McDougallP.P. & OviattB.M. (1997).International entrepreneurship literature in the 1990s and directions for future research. In D.L. Sexton & R.W. Smilor (eds.)Entrepreneurship 2000, 291–320. Chicago: Upstart Publishing Company.
35.
MeyerK. (2001).Institutions, transaction costs, and entry mode choice in Eastern Europe.Journal of International Business Studies, 32, 357–367.
36.
NeterJ., WassermanW. & KutnerM. (1983).Applied Linear Regression Models, Homewood, IL: Richard D. Irwin.
37.
OsborneK. (1996).The channel integration decision for small– to medium–sized manufacturing exporters.International Small Business Journal, 14, 40–49.
38.
PadmanabhanP. & ChoK. (1999).Decision specific experience in foreign ownership and establishment strategies: Evidence from Japanese firms.Journal of International Business Studies, 30, 25–44.
39.
PanY. & TseD. (2000).The hierarchical model of market entry modes.Journal of International Business Studies, 31, 535–554.
40.
PavittK., RobsonM. & TownsendJ. (1987). The size distribution of innovative firms in the UK: 1945–1983.Journal of Industrial Economics, 35, 297–316.
41.
RamcharranH. (2000).Foreign direct investments in central and eastern Europe: An analysis of regulatory and country risk factors.American Business Review, 18, 1–8.
42.
ShraderR., OviattB. & McDougallP. (2000). How new ventures exploit trade–offs among international risk factors: Lessons for the accelerated internationalization of the 21st century.Academy of Management Journal, 43, 1227–1247.
43.
SymeonidisG. (1996). Innovation, Firm Size and Market Structure: Schumpeterian Hypotheses and Some New Themes, OECD Working Papers, No. 161, Paris.
44.
TetherB.S., SmithI.J. & ThwaitesA.T. (1997).Smaller Enterprises and Innovation in the UK: the SPRU Innovations Database Revisited, Research Policy, 26(1)19–32.
45.
TsaoutsisK. & FrantzisN. (1998). Oi hontres business ton megalwn ths viomihanias, To Vima, November 8, D 16 17.
46.
UhlenbruckK. & De CastroJ. (2000).Foreign acquisitions in Central and Eastern Europe: Outcomes of privatization in transitional economies.Academy of Management Journal, 43, 381–402
47.
WolffJ. & PettT. (2000).Internationalization of small firms: An examination of export competitive patterns, firm size, and export performance.Journal of Small Business Management, 38, 34–47.
48.
YapC. & SouderW. (1994).Factors influencing new product success and failure in small entrepreneurial high–technology electronic firms.Journal of Product Innovation Management, 11, 418–432.
49.
ZacharakisA.L. (1997).Entrepreneurial entry into foreign markets: A transaction cost perspective, Entrepreneurship Theory and Practice, V. 21, No. 3, 23–39.
