Predicting the Entry Mode Choice of Higher Educational Institutes using Resource Based Theory; A Proposition Development Study

Abstract

The internationalization of higher education has been a growing phenomenon for the last few decades. There are various ways in which higher educational institutes can internationalize ranges from supplying education across borders, to students moving across borders, to faculty moving across borders to commercial presence across borders. Despite the growth there have being very few studies exploring the phenomena. Therefore this paper tries to expand the knowledge in entry mode selection by developing propositions which can be empirically tested by future studies. There are at least four main motives for higher educational institutes to move abroad, that is economic, academic, political and socio/cultural. The study only looked at the first two motives as they are more prominent. Entry modes in a broader basis can be categorized into two areas, full control entry modes which refers to sole ownership and shared control modes which refers to some form of collaborative modes of operation. Organizational resources can be of significant importance in explaining and predicting the entry mode choice of a firm. The resourcebased theory assumes the sole ownership to be the best entry mode available for a firm. Having review the literature study develops following propositions. The study proposes that, 1. the preference for higher control entry modes in a tacit knowledge environment is negatively influenced by academic motives and positively influenced by economic motives, 2. the preference for higher control entry modes by experienced firms will be positively influenced by the economic motives and will be negatively influenced by the academic motives, 3. the preference for higher control by larger firms is positively influenced by the economic motives and negatively influenced by academic motives, and 4. the preference for higher control modes by more reputed firms will be positively influenced by the economic motives and negatively influenced by academic motives.