This study follows an eclectic approach to investigate the foreign market entry strategies of small firms from Hong Kong. Previous researches focused on large corporations from developed countries and tackled the issue of entry mode from a single theoretical perspective. This article, however, develops a framework that integrates strategic, firm-specific, location-specific, and transaction-specific variables, and redresses the topic of entry mode selection by the newly industrializing economies (NIEs) in East Asia. Guided by this framework, questionnaire survey and intensive firm interviews are conducted. The results show that the entry selection of the sample small Hong Kong firms is determined mainly by strategic, firm-specific, and location-specific variables, whilst firm-specific ownership advantages are less important. Therefore, in order to explain the entry mode decision by the small firms of NIEs investing in their neighbouring regions, the eclectic framework is useful but has to be modified to include the unique characteristics of investing firms from NIEs and the specific investment environment of host developing countries, such as China.
Scopus Subject Areas
- Business and International Management