Technological Knowledge Intensity and Entry Mode Diversity

Abstract

This paper expands the entry mode literature by referring to multiple modes exerted simultaneously in different value chain activities within and across host markets, rather than to a single entry mode at the host market level. We apply competing theoretical perspectives internalization theory and knowledge transfer efficiency considerations on the one hand, and organizational learning theory on the other — to argue that firms’ technological knowledge intensity affect their entry mode diversity across value chain activities, across host markets, and at the overall corporate level. Analyzing a unique dataset we show that high technological knowledge intensity is strongly associated with high entry mode diversity across value chain activities and at the corporate level, but only weakly associated with greater entry mode diversity across geographic host markets.

Keywords: Entry mode diversity, Value chain activities,Technological knowledge intensity