Market Entry Strategies and Performance of Chinese Firms in Germany: The Moderating Effect of Home Government Support

Abstract

This study uses data at the firm level to examine the relationship between the market entry strategies of 556 Chinese MNEs and their performance in Germany. Based on the revisited Uppsala internationalization process model, we develop six hypotheses on the impact of different market entry modes on performance, and on the moderating effect of home government support on this relationship. The findings show significant effects of location choice, activity mode and establishment mode, as well as duration of market presence on performance. Furthermore, strong interaction effects of home government support on these relationships reveal that the advantages of different market entry strategies are amplified by home government support. We conclude with theoretical and managerial implications, as well as a reflection of limitations and directions for future research. We conclude with theoretical and managerial implications as well as a reflection of limitations and directions of future research. The study contributes to international management research by integrating performance effects and the facilitating role of home government support into the internationalization process model.