The internalisation of foreign distribution and production activities: New empirical evidence from Spain

This paper, using a logit model applied to a sample of 323 Spanish companies with international activities, analyses the key factors in the creation of sales and production subsidiaries. A high degree of fit between the results and the established hypotheses can be observed. Many interesting findings related to the main streams of entry mode research (Transaction Cost Theory and the Uppsala Model) have been supported. The intangibility and tacit nature of the products/processes involved in the foreign venture have been directly associated to wholly owned sales and production subsidiaries. Moreover, modes of entry used by Spanish firms are adapted as an incremental, experiential learning process. Finally, we did not find evidence of a relevant influence of global or multidomestic strategies on the participation of Spanish companies in international networks.