Foreign Market Entry Timing Revisited: Trade-Off between Market Share Performance and Firm Survival

Abstract

This study revisits the impact of entry timing on the performance of foreign-invested firms. The authors posit that balancing between market share performance and firm survival is critical for foreign firms to capitalize on early-mover advantages. Using a longitudinal data set of 25,513 foreign firms operating in China, the authors find that early entrants enjoy higher market shares but suffer from lower survival rates than late entrants. In addition, foreign firms’ entry mode and investment size affect their market shares and survival. The results also provide supporting evidence of the interaction effects among entry timing, entry mode, and investment size on foreign firms’ market shares and survival.