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Unformatted text preview: Thus: j H1: Firms t hat are largerand that have higher multinational experience,
are more likely to choose a sole venture for entry in relatively
lower market potential countries.
Firms that are smallerandhavelowermultinationalexperience
expected to have sufficient resources or skills to enter a large number of
L 8 JOURNAL OF INTERNATIONAL BUSINESS STUDIES. FIRST QUARTER l99* foreign markets. They therefore can be expected to use a selective strategy
and concentrate their efforts in &e more potentid foreign markets. This is
because their chances of obtaining higher returns better in such markets.
In addition, resource limitations (includingsize) make them pone toutilize
proportionately more joint ventures than industry leadee [Contractor and
Lorange 1988; Fayerweather 1982; Stopford and Wells 19723. Joint venture
arrangements allow them to share
costs and risks, as well as comp1ement.q'
assets and skills with host country partner f m s marrigan 19851. By doing
so, a fr is able to reduce the long-term uncertainty at a lower cost than
through pure hierarchical or market approaches [Beamish andanks 19871.
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This document was uploaded on 03/22/2014.
- Summer '14