Old Risks, New Reference Points? An Organizational Learning Perspective into the Foreign Market Exit and Re-entry Behavior of Firms

Irina Surdu, Edith Ipsmiller

Publikation: Beitrag in Buch/KonferenzbandBeitrag in Sammelwerk

Abstract

Going back into previously exited markets is a significant management risk. But, how are re-entry risks managed? By adding strategic reference point (SRP) rationales to the risk management literature, this chapter examines re-entry after initial entry and divestment on a sample of 654 multinational enterprise (MNE) re-entrants. The authors move away from narrow risk management lenses according to which risks happen in isolation and theorize that MNEs simultaneously manage international risk by exploiting the trade-offs among external and internal sources of risk. The authors explain that, for re-entrants, exit may become the SRP for evaluating future strategic choices. The results suggest that re-entrants tend to manage re-entry risk by choosing partner-based modes that enable them to maintain strategic flexibility at re-entry. Surprisingly perhaps, market-specific experience acquired during the initial market foray does not provide strategic flexibility, in that highly experienced firms still experience risk trade-offs.
OriginalspracheEnglisch
Titel des SammelwerksThe Multiple Dimensions of Institutional Complexity in International Business Research
Herausgeber*innen Alain Verbeke, Rob van Tulder, Elizabeth L. Rose, Yingqi Wei
ErscheinungsortSomerville, MA
VerlagEmerald Group Publishing Limited
Seiten239 - 262
ISBN (Print)978-1-80043-245-1
DOIs
PublikationsstatusVeröffentlicht - 2021

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