DETERMINANTS OF MULTINATIONAL COMPANIES' CHOICE OF MARKET-ENTRY MODE FOR OPERATING IN ETHIOPIA: AN EMPIRICAL STUDY

Getie Andualem Imiru

Abstract


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.

 

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Keywords


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

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DOI: http://dx.doi.org/10.46827/ejmms.v7i4.1296

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