Multi-market Contacts To Enter New Markets And Performance

When companies are competing with each other at multiple markets, Multimar-ket Contact occurs. Comparing with traditional competition research, the theory of Multi-market Contact reflects the competition situation more actually and dynami-cally.Although the theory of Multimarket Contact has been introduced into China as early as the 90s of last century, Chinese authors have paid quite a few attentions on it, especially the empirical study. This paper using 10 Shareholding Commercial Banks in China as sample, researches how the level of multimarket contact influen cing the profitability of a bank entering competitors' markets, how resource similar-ity, spheres of influence and competitor's status moderating the relationship between them, and how the level of multimarket contact influencing the banks' economic performance.Since the domestic research on multimarket contact is insufficient, this paper reviews the theory of multimarket contact research from the discipline of Strategic Management, Industrial Organization and International Business (?)espectively. Then, on the base of that, this paper sum up and evaluate the empirical studies about the relationship of multimarket, rivalry and performance, and the impact of multimar-ket contact on geographical market entry.After that, this paper analyzes how multimarket influencing geographical market entry and economic performance, and how the factors moderating the relationship. The theoretical model includes 7 hypotheses for the relationships and moderators mentioned above. They are:how the observed multimarket contacts influencing market entry; how the multimarket contacts by chance influencing market entry; how resource similarity influencing market entry; how factors such as resource similarity, spheres of influence and status of competitors moderating the relationship; and the performance effects of multimarket contacts.Then, this paper using the research methodology from recent empirical papers, describes the rule of choosing sample, the definition of each variable and how to evaluate them. And the selections of regression methods are introduced as well, which indlues Cox Regression model and Partial Least Squares Regression model.At last, this paper tests the seven hypotheses by SPSS 15.0 and SAS 8e. After describing and discussing the test results, this paper gets the following conclusions: (1)The probability of entering into competitors' markets for the company will get higher as the increase of multimarket contacts, however, the increase of multima-rket contacts by chance is uncorrelated with market entry;(2)Compared with low resource similarity competitors, the increase of multima-rket contacts with hign resource similarity competitors influences the probability of entry into the markets greater;(3)When one of the incumbents at the market is a higher status successful company, the impact of multimarket on increasing the probability of market entry will be more intense;(4)When the multimarket contacts between companies are reciprocal, the increase of contacts influences the probability of entry into the markets greater;(5)When controlling for other factors, the performance of a company will be higher with the increase of multimarket contacts.