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Foreign market entry mode in the hotel industry: The impact of country- and firm-specific factors

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  • Quer, Diego
  • Claver, Enrique
  • Andreu, Rosario

Abstract

One of the key decisions in the internationalisation process of hotel firms is the choice of the entry mode into a foreign country. Many different factors influence this strategic decision. From a sample of 127 entries carried out by Spanish hotel firms between 2001 and 2003, this study provides new empirical evidence that cultural distance reduces the likelihood of choosing equity entry modes, while firm profitability and internal financial funds availability favour the assumption of greater commitment in the international expansion process.

Suggested Citation

  • Quer, Diego & Claver, Enrique & Andreu, Rosario, 2007. "Foreign market entry mode in the hotel industry: The impact of country- and firm-specific factors," International Business Review, Elsevier, vol. 16(3), pages 362-376, June.
    • Handle: RePEc:eee:iburev:v:16:y:2007:i:3:p:362-376
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    Cited by:

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    2. Pappu, Ravi & Quester, Pascale, 2010. "Country equity: Conceptualization and empirical evidence," International Business Review, Elsevier, vol. 19(3), pages 276-291, June.
    3. Romero-Martínez, Ana M. & García-Muiña, Fernando E., 2021. "Digitalization level, corruptive practices, and location choice in the hotel industry," Journal of Business Research, Elsevier, vol. 136(C), pages 176-185.
    4. A. George Assaf & Alexander Josiassen & Haemoon Oh, 2016. "Internationalization and hotel performance," Tourism Economics, , vol. 22(3), pages 572-592, June.
    5. Eduardo RUSSO & Ariane Roder FIGUEIRA & Leonardo José MATARUNA-DOSSANTOS, 2023. "The Hilton hotels in the midst of the UAE 2071 centennial plan: Redesigning the UAE on the path of innovation and international tourism," Tourism and Hospitality Management, University of Rijeka, Faculty of Tourism and Hospitality Management, vol. 29(4), pages 627-638, December.
    6. López-Duarte, Cristina & Vidal-Suárez, Marta M., 2013. "Cultural distance and the choice between wholly owned subsidiaries and joint ventures," Journal of Business Research, Elsevier, vol. 66(11), pages 2252-2261.
    7. Marco-Lajara, Bartolomé & Zaragoza-Sáez, Patrocinio del Carmen & Claver-Cortés, Enrique & Úbeda-García, Mercedes & García-Lillo, Francisco, 2017. "Tourist districts and internationalization of hotel firms," Tourism Management, Elsevier, vol. 61(C), pages 451-464.
    8. Musso, Fabio & Francioni, Barbara, 2011. "Foreign Markets Entry Mode Decision for Italian Small and Medium-Sized Enterprises," MPRA Paper 50067, University Library of Munich, Germany, revised 31 Oct 2011.
    9. Lin, Wen-Ting & Liu, Yunshi & Cheng, Kuei-Yang, 2011. "The internationalization and performance of a firm: Moderating effect of a firm's behavior," Journal of International Management, Elsevier, vol. 17(1), pages 83-95, March.
    10. Santos, Maria & Brochado, Ana & Esperança, José, 2016. "Foreign direct investment patterns of global hotel chains," Journal of Business Research, Elsevier, vol. 69(11), pages 5235-5240.
    11. Zhi Shen & Francisco Puig & Justin Paul, 2017. "Foreign Market Entry Mode Research: A Review and Research Agenda," The International Trade Journal, Taylor & Francis Journals, vol. 31(5), pages 429-456, October.
    12. Musso, Fabio & Francioni, Barbara, 2009. "Foreign markets entry mode decision for SMEs. Key factors and role of industrial districts," MPRA Paper 32153, University Library of Munich, Germany.
    13. Ivanov, Stanislav & Ivanova, Maya, 2016. "Market penetration of hotel chains: Does culture matter?," Annals of Tourism Research, Elsevier, vol. 57(C), pages 259-264.
    14. Morschett, Dirk & Schramm-Klein, Hanna & Swoboda, Bernhard, 2010. "Decades of research on market entry modes: What do we really know about external antecedents of entry mode choice?," Journal of International Management, Elsevier, vol. 16(1), pages 60-77, March.
    15. Linda Woo & Sung Gyun Mun & Kwanglim Seo, 2023. "How do hotels expand into new markets? The relationship between hotel agglomeration and entry mode," Tourism Economics, , vol. 29(8), pages 2183-2199, December.
    16. Jópez Milla Julián & Driha Oana Madalina, 2009. "Spanish Hotel International Expansion: Evolution And Tendency. The Role Of Eastern Europe," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 181-187, May.
    17. Yang Kun & Buschman John D., 2017. "A Dyadic Perspective on Determinants of Entry Choices in the Global Hospitality Industry," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 53(4), pages 77-92, December.
    18. George Anastassopoulos & Fragkiskos Filippaios & Paul Phillips, 2007. "An ‘eclectic’ investigation of tourism multinationals’ activities: Evidence from the Hotels and Hospitality Sector in Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 08, Hellenic Observatory, LSE.
    19. Li, Xinjian & Huang, Songshan (Sam) & Song, Changyao, 2017. "China's outward foreign direct investment in tourism," Tourism Management, Elsevier, vol. 59(C), pages 1-6.
    20. Zengyu Huang & Xia Han & Frank Roche & John Cassidy, 2011. "The Dilemma Facing Strategic Choice of Entry Mode," Global Business Review, International Management Institute, vol. 12(2), pages 181-192, June.
    21. Falk, Martin, 2016. "A gravity model of foreign direct investment in the hospitality industry," Tourism Management, Elsevier, vol. 55(C), pages 225-237.
    22. Almenar-Llongo, Vicent & Muñoz de Prat, Javier & Orero-Blat, Maria, 2021. "Qualitative analysis for joint ventures as an entry mode in foreign direct investment," Journal of Business Research, Elsevier, vol. 123(C), pages 324-332.
    23. Rosario Andreu & Enrique Claver & Diego Quer, 2017. "Firm-specific factors and entry mode choice," Tourism Economics, , vol. 23(4), pages 756-767, June.
    24. Liedong, Tahiru Azaaviele & Peprah, Augustine Awuah & Amartey, Abednego Okoe & Rajwani, Tazeeb, 2020. "Institutional voids and firms' resource commitment in emerging markets: A review and future research agenda," Journal of International Management, Elsevier, vol. 26(3).
    25. López-Duarte, Cristina & Vidal-Suárez, Marta M., 2010. "External uncertainty and entry mode choice: Cultural distance, political risk and language diversity," International Business Review, Elsevier, vol. 19(6), pages 575-588, December.

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