Antecedents of entry mode choice when diversifying

Corporate diversification is one of the broadest investigation topics in strategic management, but there are important gaps in the literature regarding entry mode choice. Few studies have examined the extent to which pre-entry conditions influence the choice of entry mode into new businesses. Past research has focused exclusively on internal development and acquisition as ways of entering new businesses, without considering the existence of hybrid forms, such as strategic alliances, that have experienced extensive growth during the last decade. Here we present an in-depth analysis of entry mode choice that uses an integrative perspective of corporate diversification and considers strategic alliances as an alternative to traditional approaches. A survey of 272 domestic diversifying entries by 155 Spanish firms allows us to characterize the use of cooperative agreements in diversification and to stress the role of inter-firm cooperation in acquiring the knowledge and capability required to grow into new businesses.