Mode of entry choice: An empirical study of Singaporean multinationals

Abstract

This paper aims to provide insight into the choice of foreign mode of entry (as proxied by equity stakes) of Singaporean multinationals. An eclectic framework based on Hill, Hwang and Kirn's (1990) study is used to model the choice of entry mode. Three broad categories of variables, relating to control, cost and competence, are posited to affect the equity stake in an overseas venture. This study focuses on the manufacturing sector. We used a survey instrument targeting CEOs and Managing Directors and received 83 valid responses. TOBIT analysis lends support to the hypothesized relationships. © 2000 BY JOHN WILEY & SONS (ASIA) LTD.