Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-16T01:16:27.427Z Has data issue: false hasContentIssue false
  • English
  • Français

The Timing of Entry into a New Market: An Empirical Study of Taiwanese Firms in China

Published online by Cambridge University Press:  02 February 2015

Danchi Tan ,
Shih-Chang Hung  and
Nienchi Liu
Danchi Tan
Affiliation:
National Chenchi University, Taiwan
Shih-Chang Hung
Affiliation:
National Tsing Hua University, Taiwan
Nienchi Liu
Affiliation:
National Central University, Taiwan
Get access Rights & Permissions [Opens in a new window]

Abstract

This study examines the determinants of the timing of Taiwanese firms' entry into China. Our empirical findings suggest that this strategic decision is influenced by both economic and institutional concerns. In particular, we found that Taiwanese firms that expected greater benefits from early entry tended to be early entrants in China, while those that were more sensitive to uncertainty chose to defer their entry. We also found a curvilinear relationship between firm size and timing of entry into China. Our findings further indicate that the negative relationship between investment irreversibility and early entry is weaker in the presence of substantial perceived first mover advantages.

Keywords

entry timinginstitutional forcesinternational market entryproportional hazards model进入时机国际市场进入制度因素比例机率模型
Type
Articles
Information
Management and Organization Review , Volume 3 , Issue 2 , July 2007 , pp. 227 - 254
Copyright
Copyright © International Association for Chinese Management Research 2007

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aguinis, H. 1995. Statistical power problems with moderated multiple regression in management research. Journal of Management, 21(6): 1141–1158.Google Scholar
Arnold, D. J., & Queich, J. A. 1998. New strategies in emerging economies. Sloan Management Review, 40(1): 7–20.Google Scholar
Baum, J. A. C., Li, S. X., & Usher, J. M. 2000. Making the next move: How experiential and vicarious learning shape the locations of chains’ acquisition. Administrative Science Quarterly, 45(4): 766–801.Google Scholar
Chen, T.J. 2003. Network resources for internationalization: The case of Taiwan's electronics firms. Journal of Management Studies, 40(5): 1107–1130.Google Scholar
Chi, T. 1994. Trading in strategic resources: Necessary conditions, transaction cost problems, and choice of exchange structure. Strategic Management Journal, 15(4): 271–290.Google Scholar
Child, J. 1972. Organization structure and strategies of control: A replication of the Aston study. Administrative Science Quarterly, 17: 313–327.Google Scholar
Child, J., & Tsai, T. 2005. The dynamic between firms’ environmental strategies and institutional constraints in emerging economies: Evidence from China and Taiwan. Journal of Management Studies, 42(1): 95–125.CrossRefGoogle Scholar
Child, J., & Yuan, L. 1996. Institutional constraints on economic reform: The case of investment decisions in. China. Organization Science, 7(1): 60–77.CrossRefGoogle Scholar
China Statistics Press. 2003. China statistical yearbook. Beijing: China Statistics Press.Google Scholar
Cox, D. R. 1972. Regression models and life-tables (with discussion). Journal of the Royal Statistical Society, Series B, 34: 87–220.Google Scholar
Deephouse, D. L. 1996. Does isomorphism legitimate? Academy of ManagementJournal, 39(4): 1024–1039.Google Scholar
Delios, A., & Beamish, P. W. 2001. Survival profitability: The roles of experience and intangible assets in foreign subsidiary performance. Academy of Management Journal, 44(5): 1028–1038.Google Scholar
Dierickx, I., Cool, K., & Baeney, J. B. 1989. Asset stock accumulation and sustainability of competitive advantage. Management Science, 35(12): 1504–1513.Google Scholar
DiMaggio, P. J., & Powell, W. W. 1983. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2): 147–160.CrossRefGoogle Scholar
Dixit, A. K., & Pindyck, R. S. 1994. Investment under uncertainty. Princeton N.J.: Princeton University Press.Google Scholar
Eesley, C., & Uenox, M. J. 2006. Firm responses to secondary stakeholder action. Strategic Management Journal, 27(8): 765–781.Google Scholar
Folta, T. B. 1998. Governance and uncertainty: The trade-off between administrative control and commitment. Strategic Management Journal, 19(11): 1007–1028.Google Scholar
Fuentelsaz, L., Gomez, J., & Polo, Y. 2002. Followers’ entry timing from the Spanish banking sector after deregulation. Strategic Management Journal, 23(3): 245–264.Google Scholar
Gaba, V., Pan, Y., & Ungson, G. R. 2002. Timing of entry in an international market: An empirical study of U.S. Fortune 500 firms in China. Journal of International Business Studies, 33(1): 39–55.CrossRefGoogle Scholar
Grambsch, P. M., & Therneau, T. M. 1994. Proportional hazards tests and diagnostics based on weighted residuals. Biometrika, 81(3): 515–526.Google Scholar
Granovetter, M. 1985. Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91(3): 481–510.Google Scholar
Gulati, R., Nohria, N., & Zaheer, A. 2000. Strategic networks. Strategic ManagementJournal, 21(3): 203–215.Google Scholar
Hillman, A. J., & Wan, W. P. 2005. The determinants of MNE subsidiaries’ political strategies: Evidence of institutional duality. Journal of International Business Studies, 36(3): 322–340.Google Scholar
Hitt, M. A., Hoskisson, R. E., & Kim, H. 1997. International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management Journal, 40(4): 767–798.Google Scholar
Hoskisson, R. E., Eden, L., Lau, C. M., & Wright, M. 2000. Strategy in emerging economies. Academy of Management Journal, 43(3): 249–267.Google Scholar
Huang, J.-T. 2004. Law matters: Corporate acquisitions and technology licensing. Taipei: Common Wealth Magazine Co. (In Chinese.)Google Scholar
Hung, S.-C., & Whittington, R. 1997. Strategies and institutions: A pluralistic account of strategies in the Taiwanese computer industry. Organization Studies, 18(4): 551–575.Google Scholar
Isobe, T., Makino, S., & Montgomery, D. B. 2000. Resource commitment, entry timing, and market performance of foreign direct investments in emerging economies: The case of Japanese international joint ventures in China. Academy of Management Journal, 43(3): 468–484.Google Scholar
Johanson, J., & Vahlne, J. E. 1977. The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1): 23–32.Google Scholar
Johanson, J., & Vahlne, J.-E. 1990. The mechanism of internationalization. International Marketing Review, 7(4): 11–24.Google Scholar
Khanna, T., & Rivkin, J. W. 2001. Estimating the performance effects of business groups in emerging markets. Strategic Management Journal, 22(1): 45–74.3.0.CO;2-F>CrossRefGoogle Scholar
Kogut, B. 1991. Joint ventures and the option to expand and acquire. Management Science, 37(1): 19–33.CrossRefGoogle Scholar
Kwok, C. C., & Reeb, D. M. 2000. Internationalization and firm risk: An upstream-downstream hypothesis. Journal of International Business Studies, 31(4): 611–629.Google Scholar
Lieberman, M. B., & Montgomery, D. B. 1998. First-mover (dis)advantages: Retrospective and link with the resource-based view. Strategic Management Journal, 19(12): 1111–1125.Google Scholar
Lord, M. D., & Ranft, A. L. 2000. Organizational learning about new international markets: Exploring the internal transfer of local market knowledge. Journal of International Business Studies, 31(4): 573–589.Google Scholar
Luo, Y. 1998. Timing of investment and international expansion performance in China. Journal of International Business Studies, 29(2): 391–409.Google Scholar
Luo, Y., & Peng, M. W. 1998. First mover advantages in investing in transitional economies. Thunderbird International Business Review, 4(2): 141–163.Google Scholar
Luo, Y., & Peng, M. W. 1999. Learning to compete in a transition economy: Experience, environment, and performance. Journal of International Business Studies, 30(2): 269–296.CrossRefGoogle Scholar
McDonald, R., & Siegel, D. 1986. The value of waiting to invest. Quarterly Journal of Economics, 101(4): 707–727.Google Scholar
McEvily, B., & Zaheer, A. 1999. Bridging ties: A source of firm heterogeneity in competitive capabilities. Strategic Management Journal, 20(12): 1133–1156.Google Scholar
Mascarenhas, B. 1992a. First-mover effects in multiple dynamic market. Strategic Management Journal, 13(3): 237–243.Google Scholar
Mascarenhas, B. 1992b. Order of entry and performance in international markets. Strategic Management Journal, 13(7): 499–510.Google Scholar
Mascarenhas, B. 1997. The order and size of entry into international markets. Journal of Business Venturing, 12(4): 287–299.Google Scholar
Miles, R. E., Snow, C. C., & Pfeifer, J. 1974. Organization-environment: Concepts and issues. Industrial Relations, 13: 244–264.CrossRefGoogle Scholar
Miller, K. 1992. A framework for integrated risk management in international business. Journal of International Business Studies, 23(2): 311–332.Google Scholar
Mitchell, W. 1989. Whether and when? Probability and timing of incumbents' entry into emerging industrial subfields. Administrative Science Quarterly, 34(2): 208–230.Google Scholar
Mitchell, W. 1991. Dual clocks: Entry order influences on incumbent and newcomer market share and survival when specialized assets retain their value. Strategic Management Journal, 12(2): 85–100.Google Scholar
Mitchell, W., Shaver, J. M., & Yeung, B. 1994. Foreign entrant survival and foreign market share: Canadian companies' experience in United States medical sector markets. Strategic Management Journal, 15(7): 555–567.Google Scholar
Mitra, D., & Golder, P. N. 2002. Whose culture matters? Near-market knowledge and its impact on foreign market entry timing. Journal of Marketing Research, 39(3): 350–365.Google Scholar
Nelson, R. R., & Winter, S. G. 1982. An evolutionary theory of economic change. Cambridge, Mass.: Belnap/Harvard University Press.Google Scholar
Oliver, C. 1991. Strategic responses to institutional pressure. Academy of Management Review, 16(1): 145–179.CrossRefGoogle Scholar
Oliver, C. 1996. The institutional embeddedness of economic activity. Advances in Strategic Management, 13: 163–186.Google Scholar
Oliver, C. 1997. Sustainable competitive advantage: Combining institutional and resource-based views. Strategic Management Journal, 18(9): 697–713.Google Scholar
Oster, S. M. 1994. Modern competitive analysis (2nd ed.). New York N.Y.: Oxford University Press.Google Scholar
Pan, Y., Li, S., & Tse, D. K. 1999. The impact of order and mode of market entry on profitability and market share. Journal of International Business Studies, 30(1): 81–104.Google Scholar
Peng, M. W. 2003. Institutional transitions and strategic choices. Academy of Management Review, 28(2): 275–296.Google Scholar
Peng, M. W., & Heath, P. S. 1996. The growth of the firm in planned economies in transition: Institutions, organizations, and strategic choice. Academy of Management Review, 21(2): 492–528.CrossRefGoogle Scholar
Pindyck, R. S. 1991. Irreversibility, uncertainty, and investment. Journal of Economic Literature, 29(3): 1110–1148.Google Scholar
Rivoli, P., & Salorio, W. 1996. Foreign direct investment and investment under uncertainty. Journal of International Business Studies, 27(2): 335–358.Google Scholar
Schoenecker, T. S., & Cooper, A. C. 1998. The role of firm resources and organizational attributes in determining entry timing: A cross-industry study. Strategic Management Journal, 19(2): 1127–1143.Google Scholar
Schoonhoven, C. B., Eisenhardt, K. M., & Lyman, K. 1990. Speeding products to market: Waiting time to first product introduction in new firms. Administrative Science Quarterly, 35(1): 177–207.Google Scholar
Scott, W. R. 2001. Institutions and organizations. Thousand Oaks, Calif: Sage.Google Scholar
Shamsie, J., Phelps, C., & Kuperman, J. 2004. Better late than never: A study of late entrants in household electrical equipment. Strategic Management Journal, 25(1): 69–84.Google Scholar
Shankar, V., Carpenter, G. S., & Krishnamurthi, L. 1998. Late mover advantage: How innovative late entrants outsell pioneers. Journal of Marketing Research, 35(1): 54–70.Google Scholar
Shenkar, O., & von Glinów, M. A. 1994. Paradoxes of organizational theory and research: Using the case of China to illustrate national contingency. Management Science, 40(1): 56–71.Google Scholar
Song, X. M., Di Benedetto, C. A., & Zhao, Y. L. 1999. Pioneering advantages in manufacturing and service industries: Empirical evidence from nine countries. Strategic Management Journal, 20(9): 811–836.3.0.CO;2-#>CrossRefGoogle Scholar
Stiglitz, J. E., & Weiss, A. 1981. Credit rationing in markets with imperfect information. American Economic Review, 71(3): 393–409.Google Scholar
Stone-Romero, E. F., & Anderson, L. E. 1994. Techniques for detecting moderating effects: Relative statistical power of multiple regression and the comparison of subgroup-based correlation coefficients. Journal of Applied Psychology, 79: 354–359.Google Scholar
Suarez, F., & LanzoUa, G. 2005. The half-truth of first-mover advantage. Harvard Business Review, 83(4): 121–127.Google Scholar
Tan, B., & Vertinsky, I. 1996. Foreign direct investment by Japanese electronics firms in the United States and Canada: Modeling the timing of entry. Journal of International Business Studies, 27(5): 655–681.Google Scholar
Tellis, G. J., & Golder, P. N. 1996. First to market, first to fail? Real causes of enduring market leader. Sloan Management Review, 37(2): 65–75.Google Scholar
Tirole, J. 1988. The theory of industrial organization. Cambridge, Mass.: MIT Press. UNCTAD. Various years. World investment report. [Cited 22 October, 2006] Available from URL: http://www.unctad.org/Templates/Page.asp?intItemID= 1485&lang=1.Google Scholar
Ursacki, T., & Vertinsky, I. 1992. Choice of entry timing and scale by foreign banks in Japan and Korea. Journal of Banking and Finance, 16(2): 405–421.Google Scholar
Wade, R. 1990. Governing the market. Princeton N.J.: Princeton University Press.Google Scholar
Wan, W. P., & Hoskisson, R. E. 2003. Home country environments, corporate diversification strategies, and firm performance. Academy of Management Journal, 46(1): 27–45.Google Scholar
Wernerfelt, B., & Karnani, A. 1987. Competitive strategy under uncertainty. Strategic Management Journal, 8(2): 187–194.Google Scholar
Whitley, R. D. 1999. Divergent capitalisms. Oxford: Oxford University Press.Google Scholar
Wright, M., Filatotchev, I., Hoskisson, R. E., & Peng, M. W. 2005. Strategy research in emerging economies: Challenging the conventional wisdom. Journal of Management Studies, 42(1): 1–33.Google Scholar
Zaheer, S. 1995. Overcoming the liability of foreignness. Academy of Management Journal, 38(2): 341–363.Google Scholar