Entry and Survival in Foreign Markets from Emerging Countries: Technology, Brand Building and International Linkages

Abstract

This paper analyses entry and survival in the US software market by using a sample of 875 software and IT service firms located in three emerging economies - India, Ireland and Israel. The empirical analysis addresses the role of pre-entry technological capabilities and international alliances in affecting the firm decision to enter foreign markets and its survival probability. We use software trademarks registered at the US Patent and Trademark Office (USPTO) as a proxy for entry and survival in the US software market. Our empirical analysis shows that there exist significant differences between factors affecting entry and survival in foreign markets. In particular, our evidence supports the view that, while entry may be the result of factors, like fad, that are difficult to predict, survival is explained by strategic choices and firm capabilities. Finally, the role of international alliances is confirmed to be crucial in the firm internationalization process.

Keywords: Software, Patents, Trademarks, Internationalization

JEL Classification: O32, F23, R12, L86