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Market Expansion is a strategic choice for a firm that desires to grow and compete globally. Emerging markets have provided an opportunity for firms to expand. Among those markets, China is a key emerging market because the economy is considered to be one of the largest and the most popular markets for foreign entrants. Nonetheless, few studies have identified drivers of successful market expansion into the country. Developing a new definition of market-expansion success and depending on underlying theories (e.g., the first-mover advantage theory, the resource-advantage theory of competition, and the incremental internationalization theory), the current study builds a model identifying the key forces driving successful market expansion into China. Using a uniquely complied archival dataset, the study empirically test the model. The first finding is that earlier entrants achieve greater success than later ones. Second, market entry modes that involve high levels of control are more successful than those that involve low levels of control. Third, cultural and economic distance between China and home country favor successful expansion. Finally, smaller firms tend to be more successful than larger firms when expanding into China. The study discusses the contributions, implications, and limitations of these findings and suggests future research directions.
