Interpreting Results From the Multinomial Logit Model: Demonstrated by Foreign Market Entry

Abstract

This article provides guidelines and illustrates practical steps necessary for an analysis of results from the multinomial logit model (MLM). The MLM is a popular model in the strategy literature because it allows researchers to examine strategic choices with multiple outcomes. However, there seem to be systematic issues with regard to how researchers interpret their results when using the MLM. In this study, I present a set of guidelines critical to analyzing and interpreting results from the MLM. The procedure involves intuitive graphical representations of predicted probabilities and marginal effects suitable for both interpretation and communication of results. The practical steps are illustrated through an application of the MLM to the choice of foreign market entry mode.