Entry of Spanish tourism firms into new businesses

Abstract

PurposeDiversification is one of the most promising strategies for tourism firms, the entry mode choice being an essential decision. For this reason, this paper seeks to analyze the entry mode into new business areas made by Spanish tourism firms in their diversification process. It aims to focus on firm factors drawn on the resource‐based view (RBV) to examine issues such as the link between the new business and the company's original one, its diversifying experience, the reasons for diversifying and the impact of the choice of internal growth, external growth or cooperation agreements. The effects of a fit between the entry mode and the type of diversification on profitability are also considered.Design/methodology/approachFrom a mail survey to Spanish tourism firms 94 entries into new business areas were obtained and a multinomial logit regression applied.FindingsThe results show that both the diversifying experience and the reasons behind the decision to diversify influence the entry mode and support the existence of a link between the above‐mentioned fit and firm profitability.Originality/valueThe paper contributes to providing new empirical evidence about entry mode decisions, with the innovation that it has focused on a group of enterprises, those belonging to the Spanish tourism sector, which had traditionally received less attention within this field of research.