Emerging market entry and institutional change – three Swedish manufacturing firms in China between 1980 and 2010

Abstract

Firms enter emerging markets to capture untapped opportunity and pursue high growth potential. Yet emerging markets are also characterized by unstable institutions that may affect firms' market entry behavior. Although most existing studies have taken a rather short-term and static perspective to addressing foreign market entry, we specifically draw on the Uppsala internationalization process model and use a long-term approach to examine the China market entry of three Swedish firms in terms of their market knowledge and market commitment. We argue that the relation between institutional change in the host market and the market entry behavior of a particular firm evolves over time. The findings also show that the type of institutional change, as well as the accumulated market knowledge and commitments firms have made, can influence the relation between them.