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Unformatted text preview: . Therefore, we can expect their combined impact to result
preference for investment modes when oth factors are high, anda preference
for no involvement when both factors are low. This expectation is trivial as
it does not add a ny new information about firms’ behavior except maybe
strengthening the direct effects o each factor. A more interesting question
is how larger and more multinational f
irms respond in countries that have
relatively lower market potential, vice versa. A cursory review of actual
and I I CHOICE OF FOREIGN MARKET ENTRY MODE 7 f r choices shows that investment modes may be chosen by larger multiim
national f m even in lowpotentialcountries,and
by smaller andless
multinational firms in high potential countries.
Countries that have relatively lower market potential can
be expected to
have a lower likelihood of attracting foreign firms. However,firms that are
larger and that have a regional or worldwide presencemay be interested in
entering these markets for achieving their growth and profit objectives....
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- Summer '14