Wanted: strategic partners for young firms eager to enter foreign markets

Abstract

PurposeThis paper aims to investigate the relationship between strategic asset-seeking intent and firms’ entry strategies of foreign investment in the context of emerging market firms.Design/methodology/approachThis study is based on survey data of 392 Chinese foreign direct investment projects. Structural equation modelling is used for data analysis.FindingsWith stronger strategic asset-seeking intent, emerging market multinational enterprises are likely to locate their subsidiaries in developed countries, use a wholly owned subsidiary mode and invest with greater intensity, while they do not have a clear preference in entry timing.Practical implicationsThe strategic asset-seeking intent applies not only to emerging market firms but also to small and medium firms in general that have limited resources and a need to catch up with stronger competitors. This study therefore provides guidance to these firms.Originality/valueThis study contributes by investigating how the strategic asset-seeking intent affects firms’ strategies. The findings have practical implications for strategic managerial decisions that lead to sustained competitive advantage and improved firm performance.