IDEAS home Printed from https://ideas.repec.org/a/bla/jomstd/v56y2019i7p1314-1344.html
   My bibliography  Save this article

Following in Partners’ Footsteps: An Uncertainty‐Reduction Perspective on Firms’ Choice of New Markets

Author

Listed:
  • Alex Makarevich
  • Young‐Choon Kim

Abstract

In this paper, we develop a new perspective on what determines firms’ choice of new markets for entry. First, drawing on the open‐system theoretical tradition and literature on inter‐organizational networks, we advance and empirically test the proposition that firms tend to enter new markets to which they are connected by partnership ties. We then show that this network influence is filtered through the structure of firms’ network connections to new markets and firms’ experience. Specifically, we find that multiplicity of connections to new markets, as well as the extensiveness of firms’ experience and its relevance to new markets weaken the effect of network ties on firms’ choice of new markets. The results of this study indicate that firms’ choice of new markets for entry is a nuanced process that is affected by the interplay of firms’ collaborative ties, the structure of their network, and firms’ internal capabilities. We test our hypotheses in the empirical context of the U.S. venture capital (VC) industry using panel data over a 23‐year period and find broad support for them.

Suggested Citation

  • Alex Makarevich & Young‐Choon Kim, 2019. "Following in Partners’ Footsteps: An Uncertainty‐Reduction Perspective on Firms’ Choice of New Markets," Journal of Management Studies, Wiley Blackwell, vol. 56(7), pages 1314-1344, November.
    • Handle: RePEc:bla:jomstd:v:56:y:2019:i:7:p:1314-1344
    DOI: 10.1111/joms.12346
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joms.12346
    Download Restriction: no
    File URL: https://libkey.io/10.1111/joms.12346?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiao Hu & Jiayi Wang & Banggang Wu & Taiyang Zhao, 2022. "Specialist or new entrant: Who is the ideal investor for a new venture?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2055-2065, September.
    2. Sean T. Hsu & Susan K. Cohen, 2022. "Overcoming the Incumbent Dilemma: The Dual Roles of Multimarket Contact During Disruption," Journal of Management Studies, Wiley Blackwell, vol. 59(2), pages 319-348, March.
    3. Hu, Xiao & Wang, Jiayi & Wu, Banggang, 2022. "Venture capital firms’ lead orientation, network position, and selection of familiar syndicate partners," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    4. Yanjie Wu & Sujuan Wang, 2021. "Sustainable Market Entry Strategy under a Supply Chain Environment," Sustainability, MDPI, vol. 13(6), pages 1-15, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jomstd:v:56:y:2019:i:7:p:1314-1344. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2380 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.