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

Irina Surdu (), Kamel Mellahi and Keith W Glaister
Additional contact information
Irina Surdu: University of Reading
Kamel Mellahi: University of Warwick
Keith W Glaister: University of Leeds

Journal of International Business Studies, 2019, vol. 50, issue 3, No 5, 393-422

Abstract: Abstract 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 1020 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.

Keywords: foreign market exit and re-entry; organisational learning; institutional change; commitment increase; commitment decrease; operation modes (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://link.springer.com/10.1057/s41267-018-0167-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jintbs:v:50:y:2019:i:3:d:10.1057_s41267-018-0167-3

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

DOI: 10.1057/s41267-018-0167-3

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().