THE BANDWAGON EFFECT OF LEADERS' ENTRY STRATEGIES ON FOLLOWERS' ENTRY STRATEGIES
Keywords:
Foreign direct investments, entry mode, bandwagon effect, emerging countryAbstract
Firms, which have to compete with global firms in domestic market, try to internationalize for gaining competitive advantage. The aim of this study is to recommend a conceptual framework to explain the dynamics of internationalization process of leader and follower firms that internationalize from an emerging country. In this study, author tries to figure out the determinants of entry mode decisions of follower firms. In addition, bandwagon effect of leaders' entry mode strategies on followers' entry mode decisions should be investigated in this study. Multiple theories are used to explain the internationalization process of developing countries. Prepositions are given to present the bandwagon effect of leaders' entry strategies on followers' entry strategies. According to the conceptual model, leaders' entry strategies create a bandwagon effect on followers' entry strategies. Especially follower firms follow leader firms that form the reference group and learn from them. Other than previous studies, in the study this mechanism is explained with bandwagon effect. It is hoped that this study is helpful to enlighten the problem of determining the dynamics of internationalization process of emerging country firms. Moreover, this study integrates the international business and institutional theory literature with bandwagon effect and reference groups. The conceptual framework that is given in this study is beneficial for follower firms, which have to learn from leaders and provides academic contribution.Downloads
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