Key determinants of internationalization strategies of Russian and South Korean steel companies

Abstract

This paper investigates key determinants of internationalization strategies of Russian and South Korean steel companies, thus we test several hypotheses regarding ownership mode and entry mode. The results suggest that the key determinant of ownership mode is resource sufficiency and the main determinants of entry mode are technology intensity and market growth. The results can be interpreted that Russian steel companies relatively preferred wholly owned subsidiary with high level of resource sufficiency and highly preferred acquisitions in order to obtain technology. Meanwhile, South Korean steel companies preferred joint ventures with low level of resource sufficiency and showed strong propensity to greenfield investment to enter high growth markets. Interestingly, market growth variable was tested for both ownership mode and entry mode, but only showed significant correlation with entry mode.