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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

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.

Suggested Citation

  • Brouthers, Keith D. & Brouthers, Lance Eliot & Werner, Steve, 1996. "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," International Business Review, Elsevier, vol. 5(4), pages 377-394, August.
  • Handle: RePEc:eee:iburev:v:5:y:1996:i:4:p:377-394
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Brouthers, Keith D. & Brouthers, Lance Eliot & Werner, Steve, 2001. "R&D mode choices in Central and Eastern Europe," Journal of Business Research, Elsevier, vol. 52(1), pages 83-91, April.
    3. Hu, Helen Wei & Cui, Lin, 2014. "Outward foreign direct investment of publicly listed firms from China: A corporate governance perspective," International Business Review, Elsevier, vol. 23(4), pages 750-760.
    4. Laufs, Katharina & Schwens, Christian, 2014. "Foreign market entry mode choice of small and medium-sized enterprises: A systematic review and future research agenda," International Business Review, Elsevier, vol. 23(6), pages 1109-1126.
    5. 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.
    6. 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.
    7. 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.
    8. Marian Gorynia & Jan Nowak & Piotr Trapczynski & Radoslaw Wolniak, 2015. "Establishment Mode Choices of Emerging Multinationals: Evidence from Poland," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(2 (Summer), pages 101-124.
    9. 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.
    10. repec:eee:touman:v:47:y:2015:i:c:p:329-340 is not listed on IDEAS
    11. 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.
    12. Surdu, Irina & Mellahi, Kamel, 2016. "Theoretical foundations of equity based foreign market entry decisions: A review of the literature and recommendations for future research," International Business Review, Elsevier, vol. 25(5), pages 1169-1184.
    13. Vanninen, Heini & Kuivalainen, Olli & Ciravegna, Luciano, 2017. "Rapid multinationalization: Propositions for studying born micromultinationals," International Business Review, Elsevier, vol. 26(2), pages 365-379.
    14. 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.
    15. 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.
    16. Lu, Chin-Shan & Yang, Ching-Chiao, 2007. "An evaluation of the investment environment in international logistics zones: A Taiwanese manufacturer's perspective," International Journal of Production Economics, Elsevier, vol. 107(1), pages 279-300, May.
    17. 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.
    18. Canabal, Anne & White III, George O., 2008. "Entry mode research: Past and future," International Business Review, Elsevier, vol. 17(3), pages 267-284, June.
    19. 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.
    20. 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.
    21. Wrona, Thomas & Trąpczyński, Piotr, 2012. "Re-explaining international entry modes – Interaction and moderating effects on entry modes of pharmaceutical companies into transition economies," European Management Journal, Elsevier, vol. 30(4), pages 295-315.

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