This paper compares the predictions of transaction cost and institutional theories in an empirical study of the entry mode choice for 1,194 Japanese foreign subsidiaries. The findings indicate the institutional model adds significant explanatory power over and above the predictions of the transaction cost model. Using the concepts of frequency-based, trait-based and outcome-based imitation, I find support for institutional isomorphism, as later entrants tended to follow the entry mode patterns established by earlier entrants. Isomorphic behavior was also present within a firm, as firms exhibited consistency in entry mode choices across time. Further, a firm's investment experience moderated institutional influences on entry mode choice.

Why does knowing the nationality of the company help predict its financial leverage? Differences in institutional backgrounds provide only a partial answer to this question. This study suggests that national culture affects corporate capital structures. Empirical hypotheses, drawn from financial models and cross-cultural psychology, are tested against a sample of 5591 firms across 22 countries. Results show that countries with high scores on the cultural dimensions of “conservatism” and “mastery” tend to have lower corporate debt ratios. The effects are strong and remain significant even after accounting for differences in economic performance, legal systems, financial institutions, and some other well-known determinants of debt ratios.

This paper extends the study of market orientation into the international arena by developing and testing hypotheses relating to the antecedents to and consequences of market-oriented activities in firms’ export operations. Export experience, export dependence and coordinating capabilities were found to be positively related to export market-oriented activities. In turn, export market-oriented activities were positively associated with aspects of export performance.