The literature on the choice of entry mode of multinational corporations (MNCs) at the time of their entry into new host countries has almost entirely focussed on the choice of MNCs entering other developed economies. This paper addresses this lacuna in the literature using unique firm-level data collected from MNC affiliates operating in two major emerging markets, namely, South Africa and Egypt. The results indicate that two key determinants of the choice of entry mode are the resource needs of the MNC and the business/institutional environment in the host country. They also indicate that priors about the choice of entry mode that are based on developed country experience are not necessarily relevant in the emerging market context.
Discussion Paper Series, Centre for New and Emerging Markets, London Business School, No. 36, London, UK, 30 pp.