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How First Mover Advantages and Agglomeration Economies Affect Foreign Entry Survival
WCBT Faculty Publications
  • Jing'an Tang, Sacred Heart University
  • Ben S. Liu, Quinnipiac University
Document Type
Peer-Reviewed Article
Publication Date

While entry timing literatures suggest firms to enter a foreign market as pioneers to gain the first mover advantages, studies on entry locations recommend firms to enter a market where there is already a critical mass of their peers, i.e., to be late movers in order to benefit from the agglomeration effects. As two important dimensions of foreign entry strategy, entry timing and location literatures seem to offer opposite recommendations. To resolve this apparent paradox, this study builds a network-based foreign entry and performance model. We argue that these two dimensions of market entry are interdependent. Entry strategies that can achieve fit between these two dimensions will perform better. We found support for our arguments in an empirical analysis of a sample of Japanese MNEs’ nearly 10,000 FDI market entries spanning 16 years and in over 50 countries.

Citation Information

Tang, J., & Liu, B. S. (2012). How first mover advantages and agglomeration economies affect foreign entry survival. Journal of Business and Policy Research, 7(2), 120-134.