It Takes Two to Tango: Signaling Behavioral Intent in Service Multinationals' Foreign Entry Strategies

Published on Sep 1, 2015in Journal of International Management2.83
· DOI :10.1016/j.intman.2015.04.001
Charles E. Stevens9
Estimated H-index: 9
(Lehigh University),
Erin E. Makarius5
Estimated H-index: 5
(College of Business Administration),
Debmalya Mukherjee12
Estimated H-index: 12
(College of Business Administration)
An unresolved tension exists in the literature on the foreign entry strategies of service multinational corporations (SMNCs). Prior research indicates that SMNCs face higher levels of transaction costs than non-service firms, making them more likely to prefer foreign entry strategies with greater hierarchy and control. Another stream of research suggests that less hierarchical entry strategies could increase SMNCs' flexibility and their ability to learn about the local environment, allowing them to adapt products and services to local needs. This suggests that there are important, underappreciated tradeoffs involved with the degree of hierarchy in SMNCs' foreign entry mode. To address this tension in the literature, we build a conceptual approach that integrates TCE with signaling theory to argue that firms' reputation for behavioral intent could have wide-ranging impacts on SMNCs' entry mode strategy and partner selection likelihood. Integrating these theories suggests the need to acknowledge that it takes “two to tango”: the attributes and preferences of both the foreign entrant and the local partner need to be factored into foreign entry strategies. We develop propositions using this integrative approach in order to contribute to further theoretical development in this important and growing stream of research.
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  • Citations (9)
#1Charles E. Stevens (Lehigh University)H-Index: 9
#2En Xie (Xi'an Jiaotong University)H-Index: 15
Last.Mike W. Peng (UTD: University of Texas at Dallas)H-Index: 60
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#1Geoffrey M. Kistruck (York University)H-Index: 13
#2Shad S. Morris (BYU: Brigham Young University)H-Index: 11
Last.Charles E. Stevens (Lehigh University)H-Index: 9
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#1Somnath Lahiri (ISU: Illinois State University)H-Index: 15
#2B. Elango (ISU: Illinois State University)H-Index: 16
Last.Sumit K. Kundu (College of Business Administration)H-Index: 23
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#1Cher-Min Fong (NSYSU: National Sun Yat-sen University)H-Index: 5
#2Chun-Ling Lee (NSYSU: National Sun Yat-sen University)H-Index: 3
Last.Yunzhou Du (AUFE: Anhui University of Finance and Economics)H-Index: 3
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Cited By9
#1Jane Lu (China Europe International Business School)
#2Xueji Liang (SYSU: Sun Yat-sen University)
Last.Heli Wang (Singapore Management University)
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#1Gilberto Figueira da Silva (CUA: The Catholic University of America)H-Index: 1
#2Angela da Rocha (PUC-Rio: Pontifical Catholic University of Rio de Janeiro)H-Index: 14
Last.Jorge Ferreira da Silva (CUA: The Catholic University of America)
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#1Tao Bai (Xi'an Jiaotong-Liverpool University)H-Index: 1
#2Stephen Chen (Northumbria University)H-Index: 22
Last.Xiao He (University of Otago)
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#1Shufeng Simon Xiao (SDNU: Shandong Normal University)H-Index: 1
#2Yong Kyu Lew (HUFS: Hankuk University of Foreign Studies)H-Index: 6
Last.Byung Il Park (HUFS: Hankuk University of Foreign Studies)H-Index: 14
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