Institutional , Cultural and Transaction Cost Influences on Entry Mode Choice and Performance

explanations (Makino and Neupert, 2000; Taylor, Zou and Osland, 1998; Cleeve, 1997; Padmanabhan and Cho, 1996; Erramilli and Rao, 1993; Hennart, 1991; Gatignon and Anderson, 1988; Anderson and Gatignon, 1986). However, recently scholars such as Brouthers and Brouthers (2000) and Delios and Beamish (1999) have begun extending transaction cost entry mode theory by choices. We found that mode choice did matter. Firms whose mode choice could be predicted by the extended transaction cost model performed significantly better, on both financial and non-financial measures, than did firms whose mode choice could not be predicted by the extended transaction cost model. Implications for future research are discussed.