Once bitten, not necessarily shy? Determinants of foreign market re-entry commitment strategies

Surdu, I., Mellahi, K. and Glaister, K. W. (2019) Once bitten, not necessarily shy? Determinants of foreign market re-entry commitment strategies. Journal of International Business Studies, 50 (3). pp. 393-422. ISSN 0047-2506 doi: 10.1057/s41267-018-0167-3

Abstract/Summary

We investigate foreign market re-entry commitment strategies, namely the changes in the modes of operation (commitment) undertaken by multinational enterprises (MNEs) as they return to foreign markets from which they had previously exited. We combine organisational learning theory with the institutional change literature to examine the antecedents of re-entry commitment strategies. From an analysis of 1,020 re-entry events between 1980 and 2016, we find that operation mode prior to exit is a strong predictor of subsequent re-entry mode. Contrary to the predictions of learning theory, we did not find support for the effect of experience accumulated during the initial market endeavour on the re-entry commitment strategies of MNEs. In turn, exit motives significantly impact on the re-entrants' decision to re-enter via a different mode of operation, by either increasing or decreasing their commitment to the market. We show that re-entrants do not replicate unsuccessful operation mode strategies if they had previously underperformed in the market. When favourable host institutional changes occur during the time-out period re-entrants tend to increase commitment in the host market irrespective of the degree of prior experience accumulated in the market.

Item Type	Article
URI	https://reading-pure-test.eprints-hosting.org/id/eprint/77466
Identification Number/DOI	10.1057/s41267-018-0167-3
Refereed	Yes
Divisions	Henley Business School > International Business and Strategy
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