Firm resources and entry-related advantages: An empirical study in China

a r t i c l e i n f o The majority of research on order of market entry has focused on market pioneer advantages or the specialized assets that industry incumbents would need to possess. However, relatively little attention has been paid to whether and how certain firm resources or capabilities may provide latecomers with entry-related advantages. This issue is of particular interest when multinational organizations decide to enter emerging markets, such as China, where the transitional economy provides both opportunities and challenges. This study attempts to bridge this gap by discussing the entry-related advantages in terms of pioneer advantages, early follower advantages, and late entrant advantages, and by investigating how each of the entry-related advantages has unique impacts on market performance. In particular, this study examines the relations between innovation management, firm resources, entry-related advantages, and market performance simultaneously with cross-sectional data from 191 firms in China. Our findings reveal that technical resources and skills (R&S), marketing R&S, and market intelligence are associated with different advantages for market pioneers, early followers, and late entrants. Technical R&S is also found to have significant impacts on order of market entry as pioneers. Furthermore, the findings show that remarkable differences exist among the three entrant types (i.e., market pioneers, early followers, and late entrants) in their strategic approaches to attain market performance. We offer implications to foreign firms operating in China or intending to enter China's markets. During the process of economic transition over the past three decades, China has been smoothly transitioning from a planned economy to a market economy. Because of its vast population, enormous development potential, and increasing disposable income, China has become one of the world's most attractive markets for multinational companies (Wang & Lin, 2010). Consequently, there is growing interest in understanding how multinational corporations enter the Chinese market efficiently and effectively. Because the culture and institutional structure in China are different from those in other countries , especially the more developed western countries, managers from different countries tend to employ different mental models and thus perceive the relative advantages of pioneering differently In the extant literature it is still unclear if the connections between the resource-based view of the firm and entry-related advantages (Lieberman & Montgomery, 1998) function the same way in China as in other countries. It has long been the focal point of discussions in market entry research whether to treat order …