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31-07-2019 | Issue 1/2020

Journal of International Entrepreneurship 1/2020

The Impact of Entrepreneurial Orientation on Foreign Market Entry: the Roles of Marketing Program Adaptation, Cultural Distance, and Unanticipated Events

Journal:
Journal of International Entrepreneurship > Issue 1/2020
Authors:
William E. Baker, Amir Grinstein, Marcelo G. Perin
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Abstract

Scholars assert that firms with a strong entrepreneurial orientation (EO) should enjoy an advantage in foreign market entry. However, extant theory, particularly the dominant logic and adaptation frameworks, as well as supporting empirical research outside the domain of foreign market entry, suggests that the positive impact of a strong EO on foreign market entry is likely to be situational. Per the dynamic capabilities perspective, the authors first propose that marketing program adaptation (MPA) is a mediator of the EO-foreign market entry relationship. They further propose two moderators of the EO-MPA relationship, both of which are related to foreign market uncertainty: cultural distance (which increases uncertainty but is known prior to entry) and unanticipated events (which increases uncertainty but by definition are not known prior to entry). A study of 245 US MNCs supports the thesis that MPA is strongly related to foreign market entry success and that EO is an important contributor to foreign entry success when cultural distance is high and unanticipated events occur during launch but is less relevant in the opposite scenarios. There are important implications for firms entering foreign markets.

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