Management

4821 Words May 8th, 2015 20 Pages
ISBN 1947-833X Proceedings of 1st Global Business Summit Conference (GBSC 2009), Kelantan, Malaysia University of Technology Mara Malaysia, Shah Alam, 15-17 June 2009, Volume 2, pp. 128-137

Entry Mode Strategies of Malaysian Service Firms: A Resource-Based Approach
Mohammadreza Asgari*, Mohd Nazari Ismail**, Syed Zamberi Ahmad*** Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur

ABSTRACT The rapid progress in services has attracted scholars to study the behaviour and decisions of service firms. Firms from Malaysia, as a developing country, with a fast growing economy that increasingly relies on services have shown a remarkable expansion into foreign markets, which has resulted in high foreign direct investment
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Due to speedy globalization of economic activities, service firms succeeded in expanding their business into emerging markets (Ekeledo and Sivakumar, 1998). According to Blomstermo et al. (2006), rising attention is paid to research the internationalization process of service firms such as the hotel industry, tourism, retailing, insurance, banking and financial services. Trade in services, which comprised 20% of total international trade in 1980, increased to 23% in 2007 (UNCTAD, 2008). This is why the present research aims to focus on firms engaged in the service sector. To clarify the research topic and establish a basis to make hypotheses, this study intends to answer the following questions: Why do firms adopt different entry strategies to enter foreign markets? Do firm-specific resources and country-of-origin development affect the entry decision of firms? Is it possible for soft service firms to imitate the same strategies that hard service firms adopt? Does psychic distance play a vital role in the choice of entry mode? MALAYSIA’S ECONOMY AND THE ROLE OF SERVICE SECTOR Malaysia is a developing country with a GDP of US$214.7 billion in 2008 which considering its population of 25,274,133 indicates a GDP per capita of US$8,495 (comparing to China US$3,174; Thailand US$4,155; Indonesia US$2,150; and Singapore US$33,528). The service sector is an important part of Malaysia’s economy. In 2008, 45.7% of the GDP was yielded by services and 51% of the labour

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