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How does distance affect market entry mode choice? Evidence from French companies

Author

Listed:
  • Emna Moalla

    (ESSCA - Ecole Supérieure des Sciences Commerciales d'Angers)

  • Ulrike Mayrhofer

    (GRM - Groupe de Recherche en Management - EA 4711 - UNS - Université Nice Sophia Antipolis (1965 - 2019) - UniCA - Université Côte d'Azur)

Abstract

The objective of this article is to examine the relevant dimensions of distance for foreign market entry mode choice. Based on a sample of 203 interfirm linkages formed by French multinationals with partners across the world, we analyze the impact of four dimensions of distance on the choice between cooperative alliances and mergers-acquisitions. The findings indicate that administrative and economic distance have a significant influence on market entry mode choice, whereas the impact of cultural and geographic distance is not significant. They further highlight the important role of the host country's government effectiveness for market entry mode decisions.

Suggested Citation

  • Emna Moalla & Ulrike Mayrhofer, 2020. "How does distance affect market entry mode choice? Evidence from French companies," Post-Print hal-02273279, HAL.
    • Handle: RePEc:hal:journl:hal-02273279
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    Cited by:

    1. Nguyet Nguyen & Ha Thi Hoang Tran & Tuan Duong Vu, 2022. "Country Distance and Entry Mode Choice of MNEs in Vietnam’s Agricultural Sector in Context of Free Trade," Sustainability, MDPI, vol. 14(6), pages 1-16, March.
    2. Jackowicz, Krzysztof & Kowalewski, Oskar & Kozłowski, Łukasz, 2022. "Foreign bank lending: The role of home country culture during prosperous and crisis periods," Journal of Multinational Financial Management, Elsevier, vol. 66(C).
    3. Jamshid Alinasab & Seid Mohammad Reza Mirahmadi & Hassan Ghorbani & Francesco Caputo, 2022. "Discovering Knowledge and Cognitive Based Drivers for SMEs Internationalization," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2490-2518, September.
    4. Chun-Chien Lin & Yu-Ching Chiao & Tung-Lung Chang & Yu-Chen Chang, 2023. "The determinants of the use of process control mechanisms in FDI decisions in headquarters–subsidiary relationships," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
    5. Fonfara Krzysztof & Hauke-Lopes Aleksandra & Soniewicki Marcin, 2021. "Does Psychic Distance Still Matter? Empirical Evidence from Poland," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 29(4), pages 32-56, December.

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