Mode of international entry: The advantages of multilevel methods

Abstract

Abstract and Key Results ▪ International strategy empirical research on the mode of entry has typically overlooked the multilevel nature of this question and relied on non-multilevel quantitative methods. This creates important conceptual and statistical limitations. We examine such drawbacks by explaining the multilevel nature of this research question and the necessity to use multilevel methods. ▪ As an illustration, we develop a multilevel model and run a multilevel Bernoulli analysis to analyze the determinants of modes of entry, using a dataset on Japanese Foreign Direct Investment. Its results are compared to those of the dominant statistical method used in International Management for this topic: logistic regression. ▪ Research on mode of international entry has a clear conceptual and empirical multilevel dimension. Non-multilevel quantitative methods limit the conceptual development of this research and have negative statistical consequences that pose a risk for the validity and robustness of the results. In contrast, multilevel quantitative methods provide benefits when incorporating them for research on the selection of an entry mode. This has important methodological implications for future quantitative research on this topic.