Determinants of the choice of combined modes for foreign market entry: the case of Korean firms entering into Uzbekistan

Abstract

The choice of an entry mode is one of the most critical decisions for firms expanding abroad. There are a variety of foreign market entry modes such as exporting, licensing, and foreign direct investment. While many firms use only one single mode, others frequently employ multiple different combined modes for a foreign entry in a package. Mode combination can be an effective way to achieve better performance in foreign operations because of the different modes in a combination package complement each other. The topic of mode combination, however, has not yet been extensively studied theoretically and empirically. In this paper, we examine factors affecting firms’ choice between a single-mode and a combined mode by establishing hypotheses and testing them using questionnaire survey data on Korean manufacturing firms’ recent entry into Uzbekistan.