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SME Entry Mode Choice and Performance: A Transaction Cost Perspective

✍ Scribed by Keith D. Brouthers; George Nakos

Book ID
109179916
Publisher
John Wiley and Sons
Year
2004
Tongue
English
Weight
105 KB
Volume
28
Category
Article
ISSN
1042-2587

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✦ Synopsis

Although small and medium sized enterprises (SMEs) account for a significant portion of international trade, little is know about how they make international entry mode decisions. Transaction cost theory has been widely used to study entry mode selection for large firms. Here we apply the theory to SME mode choices. Further, we set out to determine if SME transaction cost mode choices provide superior performance to other mode choices. We found that transaction cost theory did a good job of explaining SME mode choice and that SMEs that used transaction cost–predicted mode choices performed significantly better than firms using other modes.

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