| An entry mode is an institutional arrangement that makes possible the entry of a company's services, technology, human skills, management or other resources into a foreign country. Selecting an inappropriate entry mode can lead to significant negative consequences. Entry mode selection is therefore one of the most critical decisions in international construction. The purpose of this research was to understand various entry modes and improve the selection decision for international construction companies.; Comparative case studies identified and defined 10 basic entry modes utilized in the international construction arena: (1) strategic alliance, (2) local agent, (3) licensing, (4) joint venture company, (5) sole venture company, (6) branch office/company, (7) representative office, (8) joint venture project, (9) sole venture project, and (10) BOT/equity project. Basic entry modes can be combined or sequenced throughout the entry into a single geographic market. These entry modes can be classified into a dichotomy: permanent entry (joint venture company, sole venture company, branch office/company, and representative office) versus mobile entry (joint venture project, sole venture project, and BOT/equity project), which differ primarily in investment risk exposure, resource commitment, and flexibility.; Complementary business and economic theories suggested 13 home country specific, home-host country specific, host country specific, and entrant specific factors that can influence the selection between permanent entry and mobile entry. Hypotheses were developed centering on these factors, e.g., with other conditions being equal, contractors are less likely to use permanent entry modes for a target market with a high competitive intensity. Binary logistic regression analysis of empirical data was used to test these hypotheses. The results were interpreted and analyzed. In addition, the regression analysis, together with a two sample t-test, provided a descriptive as well as normative statistical model for selecting superior entry modes to penetrate target foreign construction markets. |
