Choice of foreign market entry mode: A resource-based approach

Findings from one group of research studies indicate that the determinants of foreign market entry mode choice in the manufacturing sector are generalizable to the service sector. Results from another group of studies fail to support that view. It has been argued that the reason for the contradictory views is that one group of studies focused on nonseparable services, while the other group focused on separable services. Hence, it has been posited that the determinants of entry mode choice for manufacturing firms are likely to require substantial adaptation when applied to nonseparable service firms. An entry mode decision framework based on the resource-based view was developed and used to test this proposition.; The study used survey data provided by 130 senior executives from U.S. firms involved in international marketing to test the proposition. The independent variables for the study were firm-specific resources that drive a firm's competitive advantage. The dependent variable was level of control—full control mode versus shared control mode.; Findings from the study reveal that the determinants of foreign market entry mode choice for manufacturing firms are not, to a substantial degree, generalizable to nonseparable service firms. Results from the study also support the view that the resource-based approach provides a rich model for explaining entry mode strategies for manufacturing firms and nonseparable service firms.