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The Hierarchical Model of Market Entry Modes

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  • Yigang Pan

    (York University and University of Hong Kong)

  • David K Tse

    (University of Hong Kong)

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.© 2000 JIBS. Journal of International Business Studies (2000) 31, 535–554

Suggested Citation

  • Yigang Pan & David K Tse, 2000. "The Hierarchical Model of Market Entry Modes," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(4), pages 535-554, December.
    • Handle: RePEc:pal:jintbs:v:31:y:2000:i:4:p:535-554
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