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Venturing into Foreign Markets: The Case of the Small Service Firm

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  • M. Krishna Erramilli
  • Derrick E. D'Souza

Abstract

The study contrasts foreign market entry behavior of small and large service firms. The sample consisted of 141 firms of which 54 were small firms and 87 were larger firms. The study provides empirical evidence that the behavior of small firms differs from that of larger firms mainly in service industries characterized by higher capital intensity. It also suggests that at lower levels of capital intensity, small firm behavior may resemble that of larger firms. More specifically, In industries characterized by lower levels of capital Intensity, small service firms are as likely as their larger counterparts to enter culturally distant markets and to choose foreign direct Investment (FDI) modes of entry. But, at higher levels of capital Intensity, small service forms are less likely than larger ones to enter culturally distant markets, and to choose FDI modes of entry.

Suggested Citation

  • M. Krishna Erramilli & Derrick E. D'Souza, 1993. "Venturing into Foreign Markets: The Case of the Small Service Firm," Entrepreneurship Theory and Practice, , vol. 17(4), pages 29-41, July.
    • Handle: RePEc:sae:entthe:v:17:y:1993:i:4:p:29-41
    DOI: 10.1177/104225879301700403
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    References listed on IDEAS

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    2. 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.
    3. Coviello, Nicole E. & Jones, Marian V., 2004. "Methodological issues in international entrepreneurship research," Journal of Business Venturing, Elsevier, vol. 19(4), pages 485-508, July.
    4. Tseng, Chiung-Hui & Lee, Ruby P., 2010. "Host environmental uncertainty and equity-based entry mode dilemma: The role of market linking capability," International Business Review, Elsevier, vol. 19(4), pages 407-418, August.
    5. Pisani, Niccolò & Caldart, Adrián & Hopma, Jaël, 2017. "SMEs' formation of minority international joint ventures and level of internationalization: The moderating role of a global versus regional focus," European Management Journal, Elsevier, vol. 35(3), pages 414-424.
    6. Akbar, Yusaf & Balboni, Bernardo & Bortoluzzi, Guido & Dikova, Desislava & Tracogna, Andrea, 2018. "Disentangling resource and mode escalation in the context of emerging markets. Evidence from a sample of manufacturing SMEs," Journal of International Management, Elsevier, vol. 24(3), pages 257-270.
    7. Ipsmiller, Edith & Brouthers, Keith D. & Dikova, Desislava, 2021. "Which export channels provide real options to SMEs?," Journal of World Business, Elsevier, vol. 56(6).
    8. George Nakos & Keith D. Brouthers, 2002. "Entry Mode Choice of SMEs in Central and Eastern Europe," Entrepreneurship Theory and Practice, , vol. 27(1), pages 47-63, January.
    9. Westhead, Paul & Wright, Mike & Ucbasaran, Deniz, 2002. "International market selection strategies selected by 'micro' and 'small' firms," Omega, Elsevier, vol. 30(1), pages 51-68, February.
    10. Coviello, Nicole & Munro, Hugh, 1997. "Network relationships and the internationalisation process of small software firms," International Business Review, Elsevier, vol. 6(4), pages 361-386, August.

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