How do Institutions, Resources, and Corporate Governance Matter? A Perspective from Entry Strategies of Hi-Tech Firms in Foreign Markets
Date Issued
2009
Date
2009
Author(s)
Kittilaksanawong, Wiboon
Abstract
This dissertation explains how institutions shape the foreign market entry strategies of hi-tech firms with respect to their resources and corporate governance. The perceived institutional distances between the home and the host country were introduced as the critical factor in determining the firm’s strategic choices, at the corporate level, on the choice of the host country and at the subsidiary level, on the choice of entry mode and equity level. By bridging the parent firm’s perception of the institutions at the macro level as well as its resources and corporate governance at the micro level and encompassing both formal and informal institutions, we believe that an institutional approach offers a promising way to advance our understanding of the entry strategies. Institutional distances in this study were classified into regulative, normative, and cognitive dimensions. Each of these institutions took into account many aspects, state efficiency, openness, competition and regulations, as well as labor regulations for the regulative institution, and management practices as well as attitudes and values for the normative institution. The cognitive institution was represented by the cultural distance and the past entry strategies at both corporate and subsidiary level. The research context was Taiwanese firms in electronics and computer industry that had made at least one foreign market entry. Quantitative and qualitative method including several case studies was employed. The results indicated that the perceived institutional distances did influence the choices of the host country and the entry strategies. The influence was varied within and across the institutional dimensions. Further, the perceived institutional distances not only directly determined the entry strategies but also acted as a mediator between the parent firm’s attributes and the entry strategies. This study extends the literature in foreign market entry by incorporating the critical institutional consideration. The strategic decisions pertinent to entry strategies are driven not only by the corporate resources, but also by the institutions and corporate governance. Practically, this study provides a guideline for high-tech firms in formulating and implementing their entry strategies. We believe that this study would be a role model for analyzing the entry strategies of firms from newly-industrialized economies. Finally, the results of this study would be beneficial for the government to institutionalize its economy in such a way to facilitate and promote foreign direct investments.
Subjects
Institutions
Resources
Corporate Governance
Entry Strategies
High-Tech Firms
SDGs
Type
thesis
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