International expansion through start-up or acquisition: A replication

Eric W K Tsang, Junichi Yamanoi

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

Research summary: We use a sample of Singapore firms to replicate Barkema and Vermeulen's (1998) study of international expansion through start-ups or acquisitions by Dutch firms. We discover that the authors misinterpreted the regression coefficients for hypothesis testing and only two of their four hypotheses were actually tested. For these two hypotheses, one is not supported in either their study or ours, while the other is supported in their study but not ours. For the remaining two hypotheses we find support for one of them, which is concerned with the curvilinear effect of product diversity on the mode of expansion. In sum, the original study claims that all four hypotheses are supported, whereas only one is supported in the replication. More specifically, the former results, including the effects of the independent and control variables, are largely not generalizable to the latter. Managerial summary: Barkema and Vermeulen's (1998) study investigates the international expansion by Dutch firms during the period from 1966 to 1994. Their results indicate that whether a firm expands through setting up a greenfield operation or acquiring an existing operation is affected by the diversity of the firm's product lines, the diversity of the countries to which it has expanded, and how far the expansion is related to its existing business. We replicate their study using a sample of Singapore firms for the period from 1980 to 2000. Our results show only an effect of a firm's product diversity on its mode of international expansion. Our study clearly indicates the risk of drawing managerial implications from the results of a single study. More replication studies are needed for establishing a solid theoretical foundation to inform management decisions.

Original languageEnglish
Pages (from-to)2291-2306
Number of pages16
JournalStrategic Management Journal
Volume37
Issue number11
DOIs
Publication statusPublished - 2016 Nov 1

Fingerprint

International expansion
Start-up
Replication
Singapore
Product diversity
Hypothesis testing
Coefficients
Greenfield
Start-ups
Control variable
Product line
Management decisions

Keywords

  • acquisition
  • foreign direct investment
  • organizational learning
  • replication
  • start-up

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

Cite this

International expansion through start-up or acquisition : A replication. / Tsang, Eric W K; Yamanoi, Junichi.

In: Strategic Management Journal, Vol. 37, No. 11, 01.11.2016, p. 2291-2306.

Research output: Contribution to journalArticle

@article{fab6d59b188d4baab9f5fa2398b9d246,
title = "International expansion through start-up or acquisition: A replication",
abstract = "Research summary: We use a sample of Singapore firms to replicate Barkema and Vermeulen's (1998) study of international expansion through start-ups or acquisitions by Dutch firms. We discover that the authors misinterpreted the regression coefficients for hypothesis testing and only two of their four hypotheses were actually tested. For these two hypotheses, one is not supported in either their study or ours, while the other is supported in their study but not ours. For the remaining two hypotheses we find support for one of them, which is concerned with the curvilinear effect of product diversity on the mode of expansion. In sum, the original study claims that all four hypotheses are supported, whereas only one is supported in the replication. More specifically, the former results, including the effects of the independent and control variables, are largely not generalizable to the latter. Managerial summary: Barkema and Vermeulen's (1998) study investigates the international expansion by Dutch firms during the period from 1966 to 1994. Their results indicate that whether a firm expands through setting up a greenfield operation or acquiring an existing operation is affected by the diversity of the firm's product lines, the diversity of the countries to which it has expanded, and how far the expansion is related to its existing business. We replicate their study using a sample of Singapore firms for the period from 1980 to 2000. Our results show only an effect of a firm's product diversity on its mode of international expansion. Our study clearly indicates the risk of drawing managerial implications from the results of a single study. More replication studies are needed for establishing a solid theoretical foundation to inform management decisions.",
keywords = "acquisition, foreign direct investment, organizational learning, replication, start-up",
author = "Tsang, {Eric W K} and Junichi Yamanoi",
year = "2016",
month = "11",
day = "1",
doi = "10.1002/smj.2569",
language = "English",
volume = "37",
pages = "2291--2306",
journal = "Strategic Management Journal",
issn = "0143-2095",
publisher = "John Wiley and Sons Ltd",
number = "11",

}

TY - JOUR

T1 - International expansion through start-up or acquisition

T2 - A replication

AU - Tsang, Eric W K

AU - Yamanoi, Junichi

PY - 2016/11/1

Y1 - 2016/11/1

N2 - Research summary: We use a sample of Singapore firms to replicate Barkema and Vermeulen's (1998) study of international expansion through start-ups or acquisitions by Dutch firms. We discover that the authors misinterpreted the regression coefficients for hypothesis testing and only two of their four hypotheses were actually tested. For these two hypotheses, one is not supported in either their study or ours, while the other is supported in their study but not ours. For the remaining two hypotheses we find support for one of them, which is concerned with the curvilinear effect of product diversity on the mode of expansion. In sum, the original study claims that all four hypotheses are supported, whereas only one is supported in the replication. More specifically, the former results, including the effects of the independent and control variables, are largely not generalizable to the latter. Managerial summary: Barkema and Vermeulen's (1998) study investigates the international expansion by Dutch firms during the period from 1966 to 1994. Their results indicate that whether a firm expands through setting up a greenfield operation or acquiring an existing operation is affected by the diversity of the firm's product lines, the diversity of the countries to which it has expanded, and how far the expansion is related to its existing business. We replicate their study using a sample of Singapore firms for the period from 1980 to 2000. Our results show only an effect of a firm's product diversity on its mode of international expansion. Our study clearly indicates the risk of drawing managerial implications from the results of a single study. More replication studies are needed for establishing a solid theoretical foundation to inform management decisions.

AB - Research summary: We use a sample of Singapore firms to replicate Barkema and Vermeulen's (1998) study of international expansion through start-ups or acquisitions by Dutch firms. We discover that the authors misinterpreted the regression coefficients for hypothesis testing and only two of their four hypotheses were actually tested. For these two hypotheses, one is not supported in either their study or ours, while the other is supported in their study but not ours. For the remaining two hypotheses we find support for one of them, which is concerned with the curvilinear effect of product diversity on the mode of expansion. In sum, the original study claims that all four hypotheses are supported, whereas only one is supported in the replication. More specifically, the former results, including the effects of the independent and control variables, are largely not generalizable to the latter. Managerial summary: Barkema and Vermeulen's (1998) study investigates the international expansion by Dutch firms during the period from 1966 to 1994. Their results indicate that whether a firm expands through setting up a greenfield operation or acquiring an existing operation is affected by the diversity of the firm's product lines, the diversity of the countries to which it has expanded, and how far the expansion is related to its existing business. We replicate their study using a sample of Singapore firms for the period from 1980 to 2000. Our results show only an effect of a firm's product diversity on its mode of international expansion. Our study clearly indicates the risk of drawing managerial implications from the results of a single study. More replication studies are needed for establishing a solid theoretical foundation to inform management decisions.

KW - acquisition

KW - foreign direct investment

KW - organizational learning

KW - replication

KW - start-up

UR - http://www.scopus.com/inward/record.url?scp=84992416999&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84992416999&partnerID=8YFLogxK

U2 - 10.1002/smj.2569

DO - 10.1002/smj.2569

M3 - Article

AN - SCOPUS:84992416999

VL - 37

SP - 2291

EP - 2306

JO - Strategic Management Journal

JF - Strategic Management Journal

SN - 0143-2095

IS - 11

ER -