FOREIGN ENTRY STRATEGIES: ADAPTATION TO INSTITUTIONAL EFFECTS Manuel P. Ferreira1 Dan Li2 1 David Eccles School of Bus

1. FOREIGN ENTRY STRATEGIES:ADAPTATION TO INSTITUTIONAL EFFECTSManuel P. Ferreira1 & Dan Li21 David Eccles School of Business, The University of Utah, pmgtmpf@business.utah.edu & ESTG, Leiria, Portugal2 Mays Business School, Texas A&M University, Dli@cgsb.tamu.edu Entry strategies and firm characteristics * Internationally experienced multinationals are more likely to select wholly ownership entry strategies, whereas internationally inexperienced multinationals are more likely to select non-equity or partnership entry strategies. * Multinationals seeking technology integration across subsidiaries are more likely to select equity entry strategies to respond to parental isomorphic pressures. * Knowledge intensive multinationals are more likely to select green field investment or acquisition as entry strategy to overcome institutional pressures in host markets. * Knowledge seeking multinationals are more likely to select acquisition or partnerships as entry strategies to overcome institutional pressures in host markets. * Service multinationals are more likely than manufacturing multinationals to select equity entry strategies, due to high internal pressures for conformity. DISCUSSION The MNE is not restricted to one entry strategy and may select the entry strategy that better fits the current institutional conditions, and evolve to a different entry strategy as either the institutional environment changes, the firm learns how to adapt, or as it influences the surrounding institutional conditions. The institutional environment has a significant impact on the firms� selection of its foreign entry strategies. Institutional theory analysis may be valuable even in evaluating parent-subsidiary relationships and MNEs� ability for local responsiveness. Entry strategies are not totally discrete, and unrelated events, instead there is potential for significant learning from prior entries. While export entry tends to be favored when local institutional pressures are low, high commitment entry strategies absorb local uncertainty and favor legitimacy in the host country. The selection of entry strategies such as equity joint ventures and strategic alliances may be dependent on the local development of institutions, but also the parent�s strategy, and the long-term strategy for the host country. Multinationals� strategies are influenced but not absolutely determined by the external environment in which they operate.