The entry-mode decisions of brazilian multinationals

Abstract

The entry-mode choice is one of the main decisions involved in an international expansion project, even though previous studies did not explore the behavior of emerging markets multinationals internationalization process. This study has an empirical approach aiming to analyze the impact the sociological approach combined with the economic approach on entry-mode decisions by Brazilian multinationals by using Binomial Logistics Regression. The results suggest that the transaction cost theory does not have a positive correlation with the wholly owned entry mode when tested in an emerging country, different from some developed countries, verifying that factors which influence organizations in developed countries do not have the same impact on Brazilian multinationals. Moreover, it was possible to conclude that the insertion of institutional theory variables together with transaction cost theory variables increases the explanatory power of the decision on entry mode.