Higher Commitment Entry Modes in International New Ventures: The Influence of Strategical Orientations

Abstract

The choice of entry mode in foreign markets is an important strategic decision with major consequences for the success in international new ventures (INVs). It is generally accepted that these firms choose relatively low-commitment entry modes to operate in foreign markets. Nevertheless, this study extends previous international entrepreneurship research, including insights on antecedents of international new ventures’ choice of higher commitment entry modes in foreign markets. The paper also goes further than previous international entrepreneurship research, by addressing the strategic consequences of rapid entry into foreign markets. Additionally, the results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of international market orientation as an antecedent to higher commitment entry modes. The model proposes a positive effect of entrepreneurial orientation and early international entry on international market orientation which, in turn, is positively related to higher commitment entry modes. The hypotheses were tested on country-level data from Spain, using a structural equation model to analyze relationships between the latent variables.