How Do MNEs Choose Entry Modes for Emerging Markets? The Importance of Distance and International Experience

When multinational enterprises (MNEs) choose to enter new markets, they often face numerous risks, including political, cultural, economic and other aspects. Therefore, the choice of entry modes for MNEs into overseas markets has always been an important research topic in the field of international business. Based on this, this study examines the impact of various dimensions of distance on the entry mode choices of MNEs in emerging markets, with a focus on the moderating role of firms' international experience. Analyzing data from 297 listed firms and 1,275 overseas investment cases between 1997 and 2023, it explores the effects of institutional, cultural, economic, and knowledge distances on entry mode decisions. The findings indicate that greater institutional, cultural, and economic distances prompt MNEs in emerging markets to prefer minority equity entry modes, while the negative impact of knowledge distance was not confirmed. Furthermore, firms' international experience partially moderates the effects of institutional and cultural distances on entry mode choice. These insights contribute to the understanding of how distance factors affect entry mode decisions, offering a framework for assessing market potential and formulating entry strategies in emerging markets.