Foreign Market Entry in Transition Economies: Entry Timing and Mode Choice

This dissertation consists of an introduction followed by four papers on issues related to the choice of entry timing and entry mode in transition economies. The broader theme of this dissertation is market entry by foreign firms into transition economies. Transition economies are interesting not necessarily because they offer a large market per se, but often the long run perspectives are promising (Nakata & Sivakumar, 1997). Many transition economies will tend to be smaller, China of course being a very noticeable exception, and consumers have less purchasing power. The business environment in transition economies also tend to suffer from numerous maladies ranging from poor infrastructure, weak or arbitrary law enforcement, discrimination, corruption, lack of qualified suppliers, high political and economic uncertainty etc. In short, transition economies pose many challenges for the multinational enterprise (MNE), but they also offer growth opportunities and above all else a more conducive competitive environment than what is available in mature economies. A testament to the potential rewards of emerging markets is offered by Christos Pantzalis (2001) who found that MNE’s with activities in developing markets on average outperformed MNE’s without developing market exposure, suggesting that it is the market failures of developing economies that allows the MNE to capitalize on its firm specific assets.