Using PLS-SEM technique to model Malaysian construction firms' entry timing decisions in international market expansion

Abstract

Market entry timing decision is among the most critical strategies made by a firm to expand internationally. In a dynamic and competitive international environment, the entry timing decision involves the need to balance the early entry risks and the problems in losing opportunities as a result of late entry. This study proposes a theoretical framework to investigate the influence of advantages and disadvantages [dis (advantages)] on entry timing decisions of Malaysian construction firms in their international market expansion. Survey questionnaires were sent to 115 Malaysian construction firms listed under the Construction Industry Development Board of Malaysia (CIDB) with 44.7 percent response rate. A total of twenty four (24) (dis) advantages were identified and confirmed using SMART PLS-SEM (partial least square structural equation modeling) to test the model and finally established the findings. The results with β coefficient of 0.538 and t-value of 2.805 indicate that the early mover disadvantages have significantly influenced the entry timing decision of the Malaysian construction firms into international market. Hence, this study illustrates the firms' acquirement of the (dis) advantages based on their late timing of entry into international market. It is hoped that the findings would offer valuable information to Malaysian construction firms with the intention to internationalize either as the early or late movers.