Determinants of Entry Modes for International Service

This paper examines the influences on entry modes for Australian service organisations internationalising to China. A conceptual model was developed utilising past research in the field and internationalisation theory. The model incorporated the constructs of: resource commitments, previous international experience and whether or not the service could be offered independently of any physical product. The model was empirically tested using qualitative data from interviews conducted with senior representatives from 23 Australian service organisations with operations in China. The data indicated that these organisations increased the resource commitments to their Chinese operations, the longer they were in operation and the more familiar the organisation became with the Chinese environment. The data also suggested that, whilst international experience was desirable prior to entering China, it was not mandatory for success. A bias was identified amongst the respondents towards exporting those services which were separable from products to China and foreign direct investment, representative branches and significant local investment for services that were not separable from products. Field of research: International business