Specific-factors influencing late movers' entry timing decision into international market

Abstract

International market entry strategy is used to make the firm's entering new foreign market possible to expand their businesses in terms of services, products, technology, human and other resources. Entry decision is among the most critical strategies made by a firm relative to international market expansion. The firm has to decide which market to enter (entry location), how to enter (mode of entry), and when to enter (timing of entry). Focusing on the entry timing is one of the important dimensions in the process of internationalization of firms. It involves the needs to balance the early entry risk and the problems in losing opportunities as a result of late entry. In securing the position abroad, consideration of factors that may influence the entry timing decision to enter the selected market is crucial. The main objective of this study is to investigate the factors that are of critical importance influencing the entry timing decision of Malaysian construction firms to penetrate the international market as late movers. Questionnaires were sent to one hundred nine (109) Malaysian construction firms listed under Construction Industry Development Board Malaysia (CIDB)(2010) with twenty one per cent (21%) response rate. The data were analyzed using logistic regression analysis and factor analysis to establish the findings. The factor analysis was used to group the thirty (30) factors into four (4) specific-factors namely project, country, firm and industry. The logistic regression analysis shows that 78.3 per cent of the respondents preferred to be late movers. Whilst, factor analysis reveals the specific factors that loaded highest in order of significance that influenced the firms' decisions as late movers were the firm size with strong resources and competencies, size of projects, trade relationship between two countries, level of international experience, management risk attitude, ability of firms to assess market signals and opportunities, and profit targets. This study illustrates the determination of entry timing and consideration of factors influencing the late movers' decision into international construction business to enhance the firms' competitive advantage. Hence, the findings would offer valuable information to Malaysian construction firms with the intention to internationalize as late movers.