The Impact of Populism on Entry Mode Choice

The international business literature to date holds a lack of attention to the phenomenon popu-lism and its importance for entry mode choice. This study is among the first ones to take a closer look at this relationship while previous literature concentrates more generally on political risk and political uncertainty and their respective implications on entry mode choice. Thus, this study develops and tests a model to explore the potential impact of populism on the decision to either establish a Wholly-owned subsidiary or Joint Venture. Moreover, a potential moderating effect of prior internationalization experience and firm size on the role of populism is examined. A dataset containing 2,358 acquisition deals between 2013 and 2019 is compiled to test how these factors predict entry mode choice. The results demonstrate that populism entices firms to choose Wholly-owned subsidiaries over Joint Ventures. Additionally, the findings confirm a positive moderating effect of internationalization experience and firm size on the propensity to opt for Wholly-owned subsidiaries.
Masterarbeit Universität Innsbruck 2022