Market Entry into Iran as an Institutional Distant Environment: “The Key to Success is Due Diligence”

Anna Øverås & Tiril Stillufdatter Karlsen

Student thesis: Master thesis


As far as the authors of this paper are aware, no existing study has examined the appropriate mode of entry into Iran as an institutional distant environment. This paper maps the opportunities and challenges found in the Iranian market, in the post- implementation period of the Joint Comprehensive Plan of Action, a highly relevant issue for all stakeholders looking towards Iran as a possible market for investment. Based on academic literature on institutional context in transition economies, and Dunning’s eclectic paradigm, the theoretical framework is developed to provide guidance and analysis of this study. Primary and secondary data is gathered to identify the Iranian market, and to assess the appropriate mode of entry of Norwegian firms into this environment. A selected case firm of interest is used to exemplify the recommendations. One finding of this study supports the existing research that the institutional context of a country influences the mode of entry for foreign firms. Despite Iran’s challenging institutional environment, the country offers great opportunities for investment in the oil and gas industry, and is demanding technological support in its fight against air pollution. Amongst the most important findings of this paper, which is supported by empirical evidence, is that a thorough due diligence of the local partner might allow foreign firms to overcome the institutional distance in respect to market entry into Iran. The authors will discuss the implications and motives of this finding.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2016
Number of pages172
SupervisorsBjörn Jindra