Why Service and Manufacturing Entry Mode Choices Differ: The Influence of Transaction Cost Factors, Risk and Trust

Why Service and Manufacturing Entry Mode Choices Differ: The Influence of Transaction Cost Factors, Risk and Trust

ABSTRACT In this study, we suggest that disparities between service and manufacturing firms’ international entry mode choices can be explained by differences in their reaction to transaction cost based variables and by the influence of risk and trust propensity. We find that: (1) due to the investme...

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Veröffentlicht in:Journal of management studies 2003-07, Vol.40 (5), p.1179-1204
Hauptverfasser: Brouthers, Keith D., Brouthers, Lance Eliot
Format: Artikel
Sprache:eng
Schlagworte:
Business studies
Labour intensity
Management science
Manufacturing
Market entry
Multinational corporations
Organization theory
Risk
Service industries
Service industry
Transaction costs
Trust
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Zusammenfassung:ABSTRACT In this study, we suggest that disparities between service and manufacturing firms’ international entry mode choices can be explained by differences in their reaction to transaction cost based variables and by the influence of risk and trust propensity. We find that: (1) due to the investment intensive nature of manufacturing, environmental uncertainties and risk propensity influence manufacturers’ mode choices; while (2) behavioural uncertainties, trust propensity and asset specificity influence service providers’ entry mode choices because of the people‐intensive nature of services. Implications for future research are discussed.
ISSN:0022-2380
1467-6486
DOI:10.1111/1467-6486.00376