Entry Mode and Performance of Nordic Firms: Firm-Specific Advantages and International Experience

Abstract

This study investigates whether the relationship between mode of international market entry and non-location bound international experience is weaker for firms that are large or have a high foreign to total sales ratio, labeled multinational experience. Empirical evidence based on 250 foreign market entries made by Norwegian, Danish and Swedish firms suggests that the association between equity mode choice and non-location bound international experience diminishes in the presence of higher levels of multinational experience. Furthermore, firms whose entry mode choice is predicted by the model including the proposed moderating effect, on average, yield higher post-entry performance. This study sheds light on inconsistent results found in previous research investigating the impact of international experience and has practical implications for managerial decision-making.