Title

The impact of market size on new market entry : a contingency approach

Document Type

Journal article

Source Publication

European Journal of Marketing

Publication Date

2017

Volume

51

Issue

1

First Page

2

Last Page

22

Publisher

Emerald Publishing Limited

Keywords

Marketing strategy, Market entry, Market size

Abstract

Purpose – The purpose of this study is to offer explanations of the wide variation in the impact of market size on new market entry decisions – i.e. its positive impact lessens because of unreliable predictability of market size on post-entry profit and entry motivations other than post-entry profit.

Design/methodology/approach – On the basis of the two explanations, this paper builds a contingency frame that the impact of market size on new market entry depends on entry-context-specific variables. It validates the contingency frame, empirically analyzing 219 parameter estimates of the impact of market size on market entry obtained from 41 existing empirical studies.

Findings – The meta-analysis results reveal that the entry-context-specific variables used in this study – niche market entry, high-tech market entry, entry by industry incumbent firms and the year of market entry – notably moderate the impact of market size on new market entry decisions, as the research frame suggests.

Research limitations/implications – This study examines the various literature and study outcomes in the areas of marketing, economics and strategy to elucidate whether and when market size is a critical driver of new market entry. In most cases, the greater the new market size, the greater is the propensity to enter the market. However, the contingency arguments stated in this paper suggest that firms may and do enter a new market even if the market size is not large at the time of entry.

Originality/value – This paper enhances the understanding of the relative importance of market size in market entry decisions, which depend on various entry contexts. It clarifies the direction and magnitude of the impact of such entry contexts.

DOI

10.1108/EJM-12-2013-0696

Print ISSN

03090566

E-ISSN

1758-7123

Funding Information

Hong Kong Polytechnic University's General Research Fund (G-UB92)

Publisher Statement

Copyright © Emerald Publishing Limited 2017

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Full-text Version

Publisher’s Version

Recommended Citation

Min, S., Kim, N., & Zhan, G. (2017). The impact of market size on new market entry: A contingency approach. European Journal of Marketing, 51(1), 2-22. doi: 10.1108/EJM-12-2013-0696