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Dunning's eclectic theory and the smaller firm: The impact of ownership and locational advantages on the choice of entry-modes in the computer software industry

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  • Brouthers, Keith D.
  • Brouthers, Lance Eliot
  • Werner, Steve
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    Abstract

    This paper set out to investigate the entry-mode selection activities of small- and medium-sized service firms. Based on Dunning's eclectic theory (1988, Journal of International Business Studies, Vol. 19, No. 1, pp. 1-31; 1993, Multinational Enterprises and the Global Economy, AddisondashWesley) and previous entry-mode research, the entry-mode selection activities of US computer software firms were examined. The findings tend to indicate that ownership and locational advantages influence the entry-mode choice of small- and medium-sized firms in a manner similar to that of larger firms. Additionally, this study confirms the applicability of the eclectic theory of foreign direct investment to a second sector of the services industry.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 5 (1996)
    Issue (Month): 4 (August)
    Pages: 377-394

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    Handle: RePEc:eee:iburev:v:5:y:1996:i:4:p:377-394

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    Related research

    Keywords: Entry-mode Software Eclectic Theory FDI;

    References

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    1. Hamilton, William F., 1990. "The dynamics of technology and strategy," European Journal of Operational Research, Elsevier, vol. 47(2), pages 141-152, July.
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    3. John H Dunning, 1995. "Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism," Journal of International Business Studies, Palgrave Macmillan, vol. 26(3), pages 461-491, September.
    4. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan, vol. 19(1), pages 1-31, March.
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    16. James D Goodnow & James E Hansz, 1972. "Enviromental Determinants of Overseas Market Entry Strategies*," Journal of International Business Studies, Palgrave Macmillan, vol. 3(1), pages 33-50, March.
    17. Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 305-36, Fall.
    18. M Krishna Erramilli, 1991. "The Experience Factor in Foreign Market Entry Behavior of Service Firms," Journal of International Business Studies, Palgrave Macmillan, vol. 22(3), pages 479-501, September.
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    Cited by:
    1. Parente, Ronaldo & Choi, Byeongyong Paul & Slangen, Arjen H.L. & Ketkar, Sonia, 2010. "Distribution system choice in a service industry: An analysis of international insurance firms operating in the United States," Journal of International Management, Elsevier, vol. 16(3), pages 275-287, September.
    2. Czinkota, Michael R. & Grossman, David A. & Javalgi, Rajshekhar (Raj) G. & Nugent, Nicholas, 2009. "Foreign market entry mode of service firms: The case of U.S. MBA programs," Journal of World Business, Elsevier, vol. 44(3), pages 274-286, July.
    3. Tsang, Eric W.K., 2005. "Influences on foreign ownership level and entry mode choice in Vietnam," International Business Review, Elsevier, vol. 14(4), pages 441-463, August.
    4. Drogendijk, Rian & Slangen, Arjen, 2006. "Hofstede, Schwartz, or managerial perceptions? The effects of different cultural distance measures on establishment mode choices by multinational enterprises," International Business Review, Elsevier, vol. 15(4), pages 361-380, August.
    5. Brouthers, Keith D. & Brouthers, Lance Eliot & Werner, Steve, 2002. "Industrial sector, perceived environmental uncertainty and entry mode strategy," Journal of Business Research, Elsevier, vol. 55(6), pages 495-507, June.
    6. Dunning, John H. & Pak, Yong Suhk & Beldona, Sam, 2007. "Foreign ownership strategies of UK and US international franchisors: An exploratory application of Dunning's envelope paradigm," International Business Review, Elsevier, vol. 16(5), pages 531-548, October.
    7. Pezderka, Noemi & Sinkovics, Rudolf R., 2011. "A conceptualization of e-risk perceptions and implications for small firm active online internationalization," International Business Review, Elsevier, vol. 20(4), pages 409-422, August.
    8. Musso, Fabio & Francioni, Barbara, 2009. "Foreign markets entry mode decision for SMEs. Key factors and role of industrial districts," MPRA Paper 32153, University Library of Munich, Germany.
    9. Canabal, Anne & White III, George O., 2008. "Entry mode research: Past and future," International Business Review, Elsevier, vol. 17(3), pages 267-284, June.
    10. Gomez, Carolina & Werner, Steve, 2004. "The effect of institutional and strategic forces on management style in subsidiaries of U.S. MNCs in Mexico," Journal of Business Research, Elsevier, vol. 57(10), pages 1135-1144, October.
    11. Tatoglu, Ekrem & W. Glaister, Keith, 1998. "An analysis of motives for western FDI in Turkey," International Business Review, Elsevier, vol. 7(2), pages 203-230, April.
    12. Uddin, Moshfique & Boateng, Agyenim, 2011. "Explaining the trends in the UK cross-border mergers & acquisitions: An analysis of macro-economic factors," International Business Review, Elsevier, vol. 20(5), pages 547-556, October.

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