Competition at home and foreign market entry timing. Issue 1 (24th August 2018)

• Record Type: Journal Article
• Authors: Powell, K. Skylar
• Is Part Of: Multinational business review. Volume 27:Issue 1(2019)
• Page Start: 99
• Page End: 118
• Publication Date: 2018-08-24
• Subjects: China -- Service firms -- Foreign market entry timing -- Law firms -- Local-home region; International business enterprises -- Periodicals; International business enterprises -- Accounting -- Periodicals; International business enterprises -- Management -- Periodicals; Comparative accounting -- Periodicals; Comparative management -- Periodicals; 338.88
• DOI: 10.1108/MBR-10-2017-0070
• Languages: English
• ISSNs: 1525-383X

Abstract

Abstract : Purpose: Research has identified inverted U-shaped relationships between domestic competitive position, often cast in terms of home-country market share or relative profitability, and speed of entry into a foreign market. However, in some industries, firms may be especially attentive and responsive to competition between firms in their local-home market (i.e. sub-national). Hence, this study aims to explore the effect of local-home market competitive intensity on the relationship between a firm's overall competitive position and speed of entry into a foreign market. Design/methodology/approach: Data from 114 large US corporate law firms from 1992 through 2008 were used for Cox proportional-hazards regression models to estimate the moderating effect of local-home market competitive intensity on the relationship between relative profitability at the national level and speed of entry (i.e. hazard rate) into China. Findings: Less-dominant firms from highly competitive local-home markets entered China more quickly than less-dominant firms from less-competitive local-home markets. In addition, first-movers from highly competitive local-home markets tended to have more advantageous competitive profiles, as reflected in profitability, than first-movers from less-competitive local-home markets. Originality/value: This research explores an important contingency in the relationship between a firm's competitive position at home and timing of entry into a foreign market. Additionally, the results suggest that first-movers from less-competitive local-home markets may face immediate competition from better-positioned first-movers from more competitive locations within the same home market when they enter new markets.