AN IMPACT ON PERFORMANCE OF FOREIGN MARKET ENTRY CHOICES BY SMALL AND MEDIUM-SIZED ENTERPRISES

Abstract

A firm's performance in the host country to a great extent depends on its mode of market entry. Most research in the area of foreign market entry mode choice has concentrated on large firms or multi-national enterprises. This paper examines the effects of different foreign market entry modes on the performance of small and medium-size enterprises (SMEs) in Australia and Singapore. The data from a sample of 104 SMEs suggests that four market entry modes - licensing, manufacturing/wholly-owned subsidiary, franchising, and acquisition significantly impact performance. It was found that Singaporean firms were more likely to use these market entry modes than their Australia counterparts. This study also reveals that good performers tend to be relatively internationalised, in better control over their export channels, less dependent on industry information sources, and more concerned over loss of proprietary rights to knowledge. Implications of the findings for research and practice are also discussed.