First or Earliest: How Entry Order and Time Affect Foreign Entry Survival

Abstract

Though entry timing can be measured using entry time and/or entry order, the performance implications differ, which resulted in conflicting findings in the relationship between foreign market entry timing and performance. The competitive dynamics literatures suggest firms to enter a foreign market as pioneers to gain first mover advantages, agglomeration-based location studies, on the other hand, show that entering a market where a critical mass of their peers is already located, that is, to be late movers tends to benefit from the agglomeration economies. Density dependence theory, however, indicates being neither early nor late entrants, but being entrants in-between for survival advantages. To resolve such conflicting findings, this study examines simultaneously the joint effects of entry time and order on foreign entry performance. An empirical analysis of a sample of nearly 4,000 Japanese FDI entries in over 40 countries from 1985 to 2003 revealed an S-shaped curvilinear relationship between entry ti...