TY - JOUR
T1 - When experience meets national institutional environmental change
T2 - Foreign entry attempts of U.S. Firms in the Central and Eastern European Region
AU - Xia, Jun
AU - Boal, Kimberly
AU - Delios, Andrew
PY - 2009/12
Y1 - 2009/12
N2 - We develop an institutional change perspective to examine the tension that can exist between evolving external environmental influences and internal organizational influences on foreign entry attempts. Using data on the entries of 215 U.S. public firms made into 11 Central and Eastern European transition economies during the period of 1990-2003, we find that shifts in national institutional environments, from a socialist to a market economy, reduce the extent of challenges encountered to make a hierarchical entry, which leads to an increase in foreign hierarchical entry attempts but not necessarily to a decrease in relational entry attempts as institutional transformation. We find evidence of inertial influences as experienced entrants tend to follow their previous decisions when making subsequent entry attempts. Further, they are less responsive in their foreign entry strategies to the institutional transformation in a given host country than inexperienced firms. We also find that the experience gained from relational entries results in more hierarchical entry attempts, but hierarchical entry experience results in fewer relational entry attempts.
AB - We develop an institutional change perspective to examine the tension that can exist between evolving external environmental influences and internal organizational influences on foreign entry attempts. Using data on the entries of 215 U.S. public firms made into 11 Central and Eastern European transition economies during the period of 1990-2003, we find that shifts in national institutional environments, from a socialist to a market economy, reduce the extent of challenges encountered to make a hierarchical entry, which leads to an increase in foreign hierarchical entry attempts but not necessarily to a decrease in relational entry attempts as institutional transformation. We find evidence of inertial influences as experienced entrants tend to follow their previous decisions when making subsequent entry attempts. Further, they are less responsive in their foreign entry strategies to the institutional transformation in a given host country than inexperienced firms. We also find that the experience gained from relational entries results in more hierarchical entry attempts, but hierarchical entry experience results in fewer relational entry attempts.
KW - Experience
KW - Foreign entry
KW - Institutional theory
KW - National institutional environment
KW - Transition economy
UR - http://www.scopus.com/inward/record.url?scp=70350216064&partnerID=8YFLogxK
U2 - 10.1002/smj.794
DO - 10.1002/smj.794
M3 - Article
AN - SCOPUS:70350216064
SN - 0143-2095
VL - 30
SP - 1286
EP - 1309
JO - Strategic Management Journal
JF - Strategic Management Journal
IS - 12
ER -