Why Wait? The Speed of Foreign Market Re-Entry after Initial Entry and Exit

Using a unique dataset comprising of over 1,000 foreign market re-entries by multinational enterprises, we examine the antecedents of speed of foreign market re-entry into previously exited markets. Contrary to previous studies, we find that the length of host market experience accumulated between initial entry and exit does not lead to earlier re-entries for the firms in our sample. The depth of experience accumulated through operating via joint ventures and the nature of the experience determined by the exit process have a positive and significant impact for early re-entrants. We highlight that the effect of knowledge accumulated through experience decreases as firms spend a long time out of the host market, with host institutional quality mediating the relationship between prior experiences and re-entry speed.

Keywords
foreign market re-entry speed, exit, timeout, learning, experience, institutions

JEL Classifications
M1