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Manag Int Rev (2014) 54:3145
DOI 10.1007/s11575-013-0184-1
RESEARCH ARTICLE
K. Skylar Powell
Received: 10 November 2011 / Revised: 15 July 2013 / Accepted: 1 August 2013 / Published online: 12 November 2013 Springer-Verlag Berlin Heidelberg 2013
Abstract This research explores the relationship between rm protability and actual speed of foreign market entry. Results suggest that protability has an inverted U-shaped relationship with actual speed of foreign market entry, in the context of large US corporate law rms entering China. This result supports the idea that rms with both the need and resources to expand into foreign markets rapidly will do so, while laggards will lack either the resources or need to enter markets. Results also suggest that previously established ofces in culturally similar markets, larger rm size, rm infancy, and prior international experience hasten market entry. Alternatively, limited organizational slack and concentrated practices delay market entry. Unexpectedly, prior entry of competitors appears to represent a deterrent to rapid entry. Additionally, while regulatory reforms on foreign law rms in China allowed for wider geographic access, they also increased operating restrictions, slowing entry speeds. Finally, results suggest that intense home-market competitive intensity may divert or decrease resource commitments to rapid foreign expansion.
Keywords Market entry timing Protability China Service rms
Law rms
1 Introduction
This article focuses on rm protability as a factor related to speed of foreign market entry. Research suggests that early entrants may enjoy rst-mover advantages in foreign markets (Lieberman and Montgomery 1988). Yet research
K. S. Powell (&)
College of Business and Economics, Western Washington University, Bellingham, USAe-mail: [email protected]
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has also tended to focus on the consequences of order of entry into foreign markets (Hsu and Chen 2009; Luo 1995; Mascarenhas 1992a, b), without fully considering the antecedents to speed of entry (Gaba et al. 2002; Mascarenhas 1992b). It is important to explore the antecedents to speed of entry, and protability in particular, for several reasons.
To begin with, differences in speeds of entry may indicate the potential for lead times enjoyed by early entrants. Categorizations of early- versus late-entrants, as used in past research (Lieberman and Montgomery 1988; Mascarenhas 1992a), do not necessarily indicate that early entrants have time to...