Abstract

As the trend toward economic globalization increases, the internationalization of small and medium sized enterprises (SMEs) has become an important topic. Research on the performance outcomes of foreign market entry strategies has been primarily considered from the perspective of the multinational corporations. In this paper hierarchical regression analyses were conducted on archival data of 123 publicly held manufacturing SMEs based in the United States to test a contingency model that hypothesizes more of the performance variance is explained when the foreign market entry mode is strategically aligned with domestic and foreign environmental factors. The results indicate that firms will have a higher rate of international revenue growth using non-equity based (exporting) foreign market entry modes in growing domestic environments. International revenue growth is higher for equity-based modes when foreign market risks are high. The findings should provide managers of SMEs with contextual evidence for making successful foreign market entry decisions. 1 Foreign Entry Mode and Performance: Moderating Effects of Environmental Factors Growth through foreign market expansion has become an increasingly popular strategy, as previously closed foreign markets open, and economies around the world globalize. Spurred

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