Resumo

Hennart and Slangen (2015) emphasized the importance of studying the factors that influence entry mode choice in developed and emerging markets. The results of empirical studies have not provided a clear consensus on the effect of certain variables on entry mode (Morschett, Schramm-Klein, & Swoboda, 2010). There is room for further studies and an examination of whether causal relationships between the institutional environment and entry mode choice can be moderated or complemented by other specific characteristics/variables of the firm or the external environment.

This study focuses on examining the influence of the institutional environment on decisions that involve the choice of entry mode. The emphasis is on the role played by the institutional dimensions from two perspectives of the institutional theory, organizational institutionalism, and economic institutionalism, in choosing the kind of investment a firm will make in a foreign market.

The institutional differences between home and host countries do not only influence entry mode but also the level of resources that the MNE will commit to the host country. The level of institutional maturity in the host country drive the strategic decision of entering foreign markets.

Studies have shown that there is no evidence of a direct systematic effect of cultural distance on entry mode and ownership level. Other institutional variables may provide a better explanation of the choice of entry mode, mainly when the direction is considered along with the magnitude of the distance between home and host countries. The new concept of added distance may confer greater robustness on the association between distance and the entry and governance modes in the new market, as it considers the previous international experience of MNE.

Cultural distance is a weak predictor of entry mode choice as it does not consider the MNE’s expansion strategy. Neither cultural distance nor political risk adequately gauges external uncertainty. Researchers should replace them with the quality of governance, meaning the effectiveness of the government, regulatory quality, and control of corruption. The explanation of a complex phenomenon such as entry mode choice may lie in examining and measure specific characteristics of both the home and host country that influence decision making on entry mode.

Briner, R., & Denyer, D. (2012). Systematic review and evidence synthesis as a practice and scholarship tool. In Handbook of evidence-based management: Companies, classrooms and research (pp. 112–129). Hennart,_J.,_&_Slangen,_A._(2015)._Yes, we really do need more entry mode studies! A commentary on Shaver. Journal of International Business Studies, 46(1), 114–122 Morschett, D., Schramm-Klein, H., & Swoboda, B. (2010). Decades of research on market entry modes: What do we really know about external antecedents of entry mode choice? Journal of International Management, 16(1), 60–77.