Getie Andualem Imiru


Multinational corporations must make a difficult decision because their entry strategy is influenced by a number of factors. The purpose of this research is to look into the factors that influence the entry strategies chosen by multinational corporations doing business in Ethiopia. To collect data at a specific time, this study used cross-sectional surveys and an explanatory research methodology. Data from multinational corporations were collected for this study using deliberate sampling methods. In the end, only 120 (or 80%) of the 154 surveys distributed were returned. However, only 112 surveys were used for the statistical analysis, yielding a response rate of 72 percent. To investigate the factors influencing the choice of entry mode, a multinomial legit model was used. The study discovered that, at a 5% level of significance, the size of the firm and the size of the market had a positive and substantial influence on the decision to choose export and intermediate entry over the hierarchical entrance. However, at a 10% significance level, factors such as global experience, market infrastructure, cultural distance, flexibility, and degree of control are favourably and significantly impacting the decision to choose the export and intermediate modes of entrance over the hierarchical modes. The recommendations based on the study's findings consider how the study may affect different stakeholders, such as the Ethiopian government, regional businesses, international firms, and other researchers.


Article visualizations:

Hit counter


entry mode, entry mode choice, export mode, intermediate mode, hierarchical mode, small and medium enterprises

Full Text:



Agarwal, S. & Ramaswami, S. N. (1992). Choice of foreign market entry mode: Impact of ownership, location and internalization factors. Journal of International Business Studies, First Quar(8), 1–27.

Albaum, G., Duerr, E., & Strandkov, J. (2005). International marketing and export management 5Ih Edition. Prentice Hall

Hubert A. Gatignon (1986). Modes of Foreign Entry: A Transaction Cost Analysis and Proposition. Journal of International Business Studies, Vol. 17, No. 3 (autumn, 1986), pp. 1-26.

Barney, J. (1991). Firm resources and sustained competitive advantage, Journal of Management, Vol. 17, No. 1, pp.99–120.

Barney, J. B. (2001). Is the Resource-Based “View” a Useful Perspective for Strategic Management Research? Yes, The Academy of Management Review, 26 (1), pp. 41-56.

Bedi P. and Kharbanda E. (2014). Factors Affecting the Choice of Entry Mode by MNCs, International Research Journal of Commerce Arts and Science,

Bedi P., Kharbanda E. (2014). Analysis of Inflows of Foreign Direct Investment in India – Problems and Challenges, Global Journal of Finance and Management, vol. 6, no. 7.

Michaela Belu Andreea Raluca Cărăgin (2008). Strategies of Entering New Markets, the Romanian Economic Journal Year XI, no. 27.

Brouthers, K. D., Brouthers, L. E., & Werner, S. (2008). Real options, international entry mode choice and performance. Journal of Management Studies, 45(5), 936-960. [N/A].

Brouthers, K. D. & Brouthers, L. E. (2000). Acquisition or Greenfield Start-up? Institutional, Cultural and Transaction Cost Influences, Strategic Management Journal, 21 (1), pp. 89-97.

Brouthers, K. D. and Brouthers, L. E. (2003). Why Service and Manufacturing Entry Mode Choices Differ: The Influence of Transaction Cost Factors, Risk and Trust. Journal of Management Studies, 40, 1179-1204.

Brouthers, K. D., & Nakos, G. (2004). SM Entry mode choice and performance: A transaction cost perspective. Entrepreneurship: Theory and Practice, 28(3), 229–247.

Cancellieri, T. (2008). Branding and international entry modes. Baum und Pferdgarten in Italy. Copenhagen Business School

Charles, Sam (2007). From the Czech Republic to the Netherlands: developing an entry strategy for Cargospol. Retrieved from

Chen, L. Y. and Mujtaba, B. (2007) The Choice of Entry Mode Strategies and Decisions for International Market Expansion. Journal of American of Business, 10, 322.

Chen, H., & Hu, M. Y. (2002). An analysis of determinants of entry mode and its impact on performance. International Business Review, 11(2), 193–210. doi:10.1016/S0969- 5931(01)00055-5

Chen, M.-Y. & Chang, J.-Y. (2011). The choice of foreign market entry mode: An analysis of the dynamic probit model. Economic Modelling, 28(1-2), 439–450. doi:10.1016/j.econmod.2010.08.004

Chung, H. F. L. and P. Enderwick (2001). An investigation of market entry strategy selection: Exporting vs. Foreign Direct Investment modes - a home-host country scenario. Asia Pacific Journal of Management 18(4): 443-460.

Cuervo-Cazurra, A. (2012). Extending theory by analyzing developing country multinational companies: Solving the goldilocks debate, in: Global Strategy Journal, 2, 3, 153-167.

Cyert, R. M. and March, J. G. (1992). A Behavioral Theory of the Firm. Second Edition, Blackwell Publishers, Cambridge.

William L. Mboma et al. (2021). Factors influencing international market entry strategies; a case study of South African companies operating business in Tanzania, International Journal of Economics, Commerce and Management Vol. IX, Issue 4, April 2021

Dunning, J. H. (1988). The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions, Journal of International Business Studies, 19 (1), pp. 1-31.

Dunning, J. H. (2001). The eclectic (OLI) paradigm of international production: Past, present and future, International Journal of the Economics of Business, 8 (2), pp. 173-190. 23.

Dunning, J. H. (2003). Determinants of Foreign Direct Investment: Globalization-Induced changes and the role of policies, In Tungodden, B., Stern, N. and Kolstad, I. (eds.), Annual World Bank Conference on Development Economics (ABCDE) Europe, Oxford University Press and World Bank, Paris, France, pp. 279-290

Ekeledo I. and Sivakumar K. (1998). Foreign Market Entry Mode Choice of Service Firms: A Contingency Perspective, Journal of the Academy of Marketing Science, retrieved from

Erramilli, M. K. (1990). Entry mode choice in service industries, International Marketing Review, Vol. 7 No.5, pp.50-62

Hollensen S. (2011). Global marketing - a decision-oriented approach (ed. 5th). Harlow, UK: Pearson.

Hollensen, S. (2004). Global Marketing: A Market-responsive Approach (3rd ed). Financial Times Prentice Hall, Harlow, UK

Hollensen, S., Boyd, B. & Ulrich, A.M.D. (2014). Entry Mode Strategies into the Brazil, Russia, India and China (BRIC) Markets. Global Business Review 15 (3), 423–445

Johanson, J. and Vahlne, J. (1977). The internationalization process of the firm: a model of knowledge development and increasing foreign markets commitment, Journal of International Business Studies, Vol. 8, No. 1, pp.23–32.

Mahdi H. Maryam, H. & Hamidreza, K. (2012). Factors Influencing Entry Mode Selection in Food Industry of Small and Medium-sized Enterprises (SMEs) in Iran. International Journal of Marketing Studies; International Journal of Marketing Studies; Vol. 4, No. 5; 2012 ISSN 1918-719X E-ISSN 1918-7203 Published by Canadian Center of Science and Education.

Koch, A. J. (2001). Selecting overseas markets and entry modes: two decision processes or one? Marketing Intelligence & Planning, 19(1), 65–75. doi:10.1108/02634500110366120

Koch, A. J. (2001). Selecting overseas markets and entry modes: two decision processes or one?, Marketing Intelligence & Planning, Vol. 19 No. 1, pp. 65-75

Kotabe M., Helsen K. Global Marketing Management. 7th ed. NJ: Wiley, 2016. pp. 624

Kotler, F., & Armstrong, G. (2009). Principles of Marketing (13th ed.). Prentice Hall.

Kumar S. B. and Gelb S. (2004). Determinants of MNCs’ mode of entry into emerging markets: some evidence from South Africa and Egypt. Center for new and emerging markets, Retrieved from

Huang Lin, Huang (2000). Choice of entry mode in an emerging market: Influences on Entry strategies to China. Journal of global marketing 14(1), 83-109.

Lu. Y., Karpova, E. E. & Fiore, A. M. (2011). Factors influencing international fashion retailer’s entry mode choice. Journal of Fashion Marketing and Management 15 (1), 58-75.

Luo Y. (2002). Determinants of entry in an emerging economy: a multilevel approach, Journal of Management Studies 38:3 May 20010022-2380

Starkweather J. and Moske A. K. (2011). Multinomial Logistic Regression. Retrieved in 2013, from

Luo, Y. (2001). Determinants of Entry in an Emerging Economy: A Multilevel Approach; Journal of Management Studies, Blackwell Publishing 38(3), 443-472

Makadok, R. (2001). Toward a synthesis of the resource-based and dynamic-capability views of rent creation’, Strategic Management Journal, Vol. 22, No. 5, pp.387–401.

Mooi, E. & Sarstedt, M. (2011). A concise guide to market research: The process, data, and methods using IBM SPSS Statistics. (First, pp. 1-329). Springer Berlin Heidelberg.

Mukli, L., Cota, A., & Mersini, R. (2012). Foreign Direct Investment and Entry Modes of Mobile Telecommunication Companies in Albania. European Scientific Journal, ESJ, 8(7).

Musso, F. & Francioni, B. (2009). Foreign markets entry mode decision for SMEs: Key factors and role of industrial districts. In 35th EIBA Annual Conference-Valencia, 1-28.

Mwiti, E. K. (2013). International Entry Mode Choices among Foreign Small and Medium Enterprises (SMEs) - new evidence in Entrepreneurship perspective. International Journal of Advanced Research in Management and Social Science Vol. 2 | No. 5 | May 20.

North, D. C. (1990). Institutions, institutional change and economic performance, Cambridge University Press, Cambridge

Peng, M. (2009). Global strategic management, 2nd edition. South Western Engage Learning. London

Peteraf, M. (1993). The Cornerstones of Competitive Advantage: A Resource-based View, Strategic Management Journal, 14, pp. 179-191.

Polesello, D., Amal, M. and Hoeltgebaum (2013). Determinants of International entry mode choice: a case study of a Brazilian multinational, BASE, Revista de Administração e Contabilidade da Unisinos, 10 (2), pp. 181-194.

Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors, Free Press, New York, NY.

Puljeva, A., & Widen, P. (2006). The Influence of Internal and External Factors on Entry Modes. Master thesis. Lulea University of Technology, Marketing Department of Business Administration and Social Sciences.

Howard S. (2001) Foreign Entry Mode and Performance: The Moderating Effects of Environment. Journal of Small Business Management.

Franklin R. Root (1987). Entry Strategies for International Markets. Livingston books.

Root, F. R. (1994). Entry Strategies for International Markets, Lexington Books, San Francisco, CA.

Jamshid Salehi Sadaghiania, Nabi Allah Dehghanb, Kambiz Navabi Zand (2011). Impact of International Market Entry Strategy on Export Performance. Journal of Mathematics and Computer Science Vol .3 No.1 (2011) 53-70.

Samiee, S. (1999). The Internationalization of Services: Trends, Obstacles and Issues, Journal of Services Marketing, 13 (4-5), 319–28.

Sanchez-Peinado, E., Pla-Barber, J., & Hébert, L. (2007). Strategic variables that influence entry mode choice in service firms. Journal of International Marketing, 15(1), 67–91.

Sharma, V. M. & Erramilli, M. K. (2004). Resource-Based Explanation of Entry Mode Choice. Journal of Marketing Theory and Practice 12 (1), 1-18

Kyle Stiegert, Archie Amir Ardalan, and Thomas Marsh (2006). Foreign-Market Entry Strategies in the European Union. Journal of Food Distribution Research 37(3).

Svend Hollensen (2007). Global marketing: a decision-oriented approach. 4th ed. Harlow: Pearson Education Limited, 2011. p. 801

Taro Yamane (1967). Statistics, an introductory analysis, Determining sample size. New York: University of Florida.

Multinomial logistic regression - Wikipedia. (2022). Retrieved 29 July 2022, from

Twarowska, P. (2013). International business strategy - reasons and forms of expansion into foreign Markets. International conference 19-21 June 2013 Zadar, Croatia

UNCTAD (2002). Investment and Innovation Policy Review: Ethiopia. New York and Geneva: United Nations. Retrieved on May 10, 2014 from

United Nations Conference on Trade and Investment (UNCTAD) (2014). Economic Development in Africa. Catalyzing investment for transformative growth in Africa. United Nations Conference and Trade and Development.

Werner, S. (2002). Recent developments in international management research: A review of 20 top management journals. Journal of Management, 28(3): 277–305.

Wilkinson, I. F. & Nguyen, V. (2003). A Contingency Model of Export Entry Mode Performance: The Role of Production and Transaction costs”. Australasian Marketing Journal 11 (3).

Williamson, O. E. (1985). The Economic Institutions of Capitalism. New York: Free Press, pp. 43-63.

Wrona, T. & Trapczynski, P. (2012). Re-explaining international entry modes—Interaction and moderating effects on entry modes of pharmaceutical companies into transition economies. European Management Journal 30(4), 295–31

Yamane Taro (1967). Statistics, an introductory analysis, Determining sample size. New York: University of Florida.

Zacharakis, A. (1997). Entrepreneurial Entry into Foreign Markets: A Transaction Cost Perspective. Entrepreneurship Theory & Practice 21(3), 23–3

Zimmerer Norman M. Scarborough (2008). Essentials of Entrepreneurship and Small Business Management, 5th Edition. Pearson.



  • There are currently no refbacks.

Copyright (c) 2022 Getie Andualem Imiru

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

The research works published in this journal are free to be accessed. They can be shared (copied and redistributed in any medium or format) and\or adapted (remixed, transformed, and built upon the material for any purpose, commercially and\or not commercially) under the following terms: attribution (appropriate credit must be given indicating original authors, research work name and publication name mentioning if changes were made) and without adding additional restrictions (without restricting others from doing anything the actual license permits). Authors retain the full copyright of their published research works and cannot revoke these freedoms as long as the license terms are followed.

Copyright © 2017-2023. European Journal of Management and Marketing Studies (ISSN 2501 - 9988) is a registered trademark of Open Access Publishing GroupAll rights reserved.

This journal is a serial publication uniquely identified by an International Standard Serial Number (ISSN) serial number certificate issued by Romanian National Library. All the research works are uniquely identified by a CrossRef DOI digital object identifier supplied by indexing and repository platforms. All the research works published on this journal are meeting the Open Access Publishing requirements and standards formulated by Budapest Open Access Initiative (2002), the Bethesda Statement on Open Access Publishing (2003) and  Berlin Declaration on Open Access to Knowledge in the Sciences and Humanities (2003) and can be freely accessed, shared, modified, distributed and used in educational, commercial and non-commercial purposes under a Creative Commons Attribution 4.0 International License. Copyrights of the published research works are retained by authors.