International hotel firms development: Influence on choices of entry mode.

Once firm decides to enter a foreign market, it has to choose a mode of entry, that is, select an institutional arrangement for organizing and conducting international business transactions. Since entry modes have a major impact on the firm's overseas business performance, their selection is regarded as a critical international business decision. Especially, for hotel business mode of entry is most difficult and complex process since hotel investment occur high capital. This research effort was designed to investigate the influential factors in the environment of foreign country and international lodging company. Once identified, an attempt was made to determine if there were any relationships which existed between these factors and entry mode choices when these international hotels attempted expansion into new international markets. This effort was initially influenced by the transaction cost analysis (TCA) which insists firm chooses an entry mode which minimise the all costs associated with its integration. The TCA stresses the importance of firm-specific assets, uncertainty variables, and free-riding potential. Certain unique characteristics of lodging business have been considered when selecting the variables for the empirical research. A conceptual framework with 12 hypotheses has been established. However, after data collecting process, 4 variables were eliminated due to data unavailability. A total of 591 international hotel openings are included and ordered probit/logit models are used to analyse the sample. The findings from the research included eight propositions that explain the relationships among the influential variables and entry mode choices in the international hotel firms. Although numerous variables appear to influence a firm's particular choice of entry mode in a given situation, uncertainty variables seem to be particularly important