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Entry Mode, Market Selection, and Innovation Performance

Author

Listed:
  • Chong Wu

    (Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China
    Business School, Nanjing University, Nanjing 210023, China)

  • Fang Huang

    (Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China)

  • Caihong Huang

    (Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China)

  • Huiming Zhang

    (Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China)

Abstract

Recent studies highlighted the need for multi-perspective research on the internationalization and performance of emerging market multinational enterprises (EM-MNEs) and revealed why many EM-MNEs perform negatively when they respond to the host-country environment. Using a sample of listed Chinese manufacturing firms from 2003 to 2014, this study examines the relationship between entry mode choice, which is driven by different environmental response patterns, and firms’ innovation performance. We further analyze the moderating role of market selection on the relationship between host-country institutional factors and firms’ innovation performance. The results show that the international breadth of firms and the economic stability and investment protection of the host country significantly promote firms’ innovation performance. While the entry mode is unilaterally driven by the host-country response, early international experience and the international depth of firms have significant negative effects on firms’ innovation performance. The level of economic development in the invested area plays a moderating role in the relationship between the host-country institutional factors and firms’ innovation performance. Our findings enrich the literature on the relationship between internationalization and EM-MNE performance, and provide inspiring and straightforward empirical evidence.

Suggested Citation

  • Chong Wu & Fang Huang & Caihong Huang & Huiming Zhang, 2018. "Entry Mode, Market Selection, and Innovation Performance," Sustainability, MDPI, vol. 10(11), pages 1-24, November.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:11:p:4222-:d:183161
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