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7.2 Literature Review

This section firstly reviews the literatures on the definition of entry timing (ET) and entry mode (EM) and, secondly, analyzes and discusses on the influential factors (IF) for both entry timing and entry mode (ETEM) decisions.

A. Entry Timing and Entry Mode Decisions

Generally in international business, it is important to understand the timing decision of firms to penetrate a selected foreign market, where firms normally face a particularly difficult decision of planning the right time to enter a foreign market [6]. Hence, timing of foreign direct investment also plays a critical role in multinational corporations' market entry strategy [7]. Green et al. [8] argued that entry timing may affect the firm's competitive position, especially on the ability and competency of a firm to fulfill its objectives in order to attain or even sustain its competitive edge. As shown in many previous studies, the order of entry represents an ordinal ranking that assesses market entry in terms of first entrant, early mover, second entrant, early follower, fast follower, late entrant, and LM [1, 9, 10]. Early mover (EM) is defined as the first firm or the first few firms to enter a new market when the market lead time that separates them is insignificant to enter a new product category [11]. Another researcher defined an EM as the very first firm to bring an innovative product or service to market [12].

Simultaneously, Chen and Chang [13] accentuated that the choice of entry mode is one of the most critical decisions faced by multinational enterprises (MNEs) to operate in the international market. Previous studies show that entry mode decisions such as joint venture, wholly owned, and merger and acquisition are found to be effective entry mode strategies in the international market [14, 15]. Hence, a hierarchical model of the basic entry mode choices for construction firms has been established as follows: strategic alliance, build-operate-transfer/equity project, joint venture project, representative office, licensing, local agent, joint venture company, sole venture company, and branch office/company under two main modes [14]. The entry modes were further categorized into two groups, namely, equity (EQ) and non-equity (NEQ) modes based on the level of commitment of resources and knowledge on international market. Hence, in this study, the entry timing decisions used in the questionnaires to inquire about the firms' decision either they prefer to be the EM or the LM. The type of entry modes adopted in this study, known as the entry mode taxonomy, was established by Chen and Messner [14].

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