| Host country business environment factors are important predictors of corporate decision-making and choice of foreign market entry modes (strategies). Management research in the area of foreign market entry strategy process is relatively new and extends from 1980's. The stage models of internationalization, specifically, product life cycle model (Vernon, 1966) and internationalization process models (Johanson & Vanlne, 1977) as well as foreign market entry decision models (Madhok, 1993; Sharma, 1998; Shama, 2000) well contributed to research. But they have some limitations.; The focus of this study is two fold. First, to develop a theoretical model of foreign market entry strategy process integrating previous research integrating previous research. The model involves host country and home country business environment factors, company internal determinants of strategy, foreign market entry strategy choice, strategy implementation, and performance assessment. Secondly, to empirically test the model involving relationships of host country business environment factors with equity-based foreign market entry mode (strategy) choice. Host country political, macroeconomic, resource, and market conditions, internal economic relations (market reforms), external economic relations consistent with western standards as well as relations with the western countries were used as determinants of equity-based foreign market entry mode choice. Objective (archival) data about 24 Eastern European and Former Soviet Countries (EE and FSC) and preliminary (survey) data about the Czech Republic, Hungary, Estonia, Latvia, Lithuania, Kazakhstan, and Ukraine were used in the empirical testing. Also actual company entry strategies (modes) were tested in relations with performance outcomes.; Results help foreign companies, host and home countries, and international economic organizations to formulate and implement strategies appropriate to each of the EE and FSC. Predictions (ratings) of the host country business environment conditions and the determination of the host country risk levels are useful for interested parties to make correct decisions relative to these countries. |
