Entry Mode Choice by Emerging Market Multinationals: A Review of Theory, Evidence, and Unresolved Debates

Abstract

The international expansion of emerging market multinationals (EMNEs) has become one of the defining features of the global economy, yet the theoretical apparatus of international business — developed largely from the experience of Western multinationals — fits EMNE behaviour imperfectly. This review synthesises three decades of research on foreign market entry mode choice and evaluates how well its core frameworks (transaction cost economics, the eclectic paradigm, institutional theory, and the resource-based and learning perspectives) explain the observed strategies of EMNEs. The review documents systematic divergences between theoretical predictions and EMNE behaviour: a greater willingness to enter institutionally difficult markets, heavier reliance on partnership-based modes, springboard acquisitions aimed at asset acquisition rather than asset exploitation, and internationalisation sequences that compress or invert the incremental stages predicted by process models. The paper organises competing explanations of these divergences, identifies the conditions under which conventional theory retains predictive power, and sets out an agenda for research on entry mode dynamics — mode change over time — which remains the least developed area of the field.