Implications and conclusion
In this study, we examined the performance implications of equity entry mode choice of SMEs entering Norway. Using a crosssectional questionnaire survey, a sample of 146 SMEs were analysed. Our results indicate that the multi-item measures of performance used in this study were statistically significant measures for all the firms in the sample. However, the relative importance of each measure differs among the firms and, as a result, we considered the multiplicative interaction of the relative importance attached to each of the measures and the level of satisfaction to derive the performance measure in this study. The employment of a broader perceptual measure of performance, which considers financial and non-financial measures, is significant in that it inspires confidence in our results. A robust check using an alternative performance measure yields similar qualitative results. In this way, this study contributes to resolving the problems associated with measuring performance. We suggest that our approach to measuring performance may advance existing management research. Turning to the cross-sectional regression results, we found that the size of the firm and sector of operation have a significant relationship with CBM & As and FWOGS and all the three entry modes, respectively. The finding that size influences the performance of SMEs suggests that small firms are more flexible than large multinational firms due to their size and a lesser degree of organisational inertia, consistent with the view of Hannan et al. (2002) and Benito-Osorio et al. (2016). Sectors are positively and significantly related to the performance of CBM & As and FWOGS but are negatively associated with IJVs, which tend to have government as partners. The results indicate that ownership type, trust and convergence of strategic goals are significantly related to the overall performance of IJVs, while previous international experience did not have any significant relationship with the entry modes. Our study has several implications for SME managers. First, our results imply that prior international experience does not help to overcome the transaction costs and enormous location-specific advantages in Norway and hence the negative influence on performance. However, firm characteristics, namely, size and sector of operation, tend to have significant influence on SME performance. Second, IJVs with government as a partner tend to exhibit poor performance. However, trust and congruity of strategic goals are important factor for IJV performance.
