The Timing of Entry into a New Market: An Empirical Study of Taiwanese Firms in China Danchi Tan 1 , Shih-Chang Hung 2 , and Nienchi Liu 3 1 National Chenchi University, Taiwan, 2 National Tsing Hua University, Taiwan, and 3 National Central University, Taiwan ABSTRACT This study examines the determinants of the timing of Taiwanese firms’ entry into China. Our empirical findings suggest that this strategic decision is influenced by both economic and institutional concerns. In particular, we found that Taiwanese firms that expected greater benefits from early entry tended to be early entrants in China, while those that were more sensitive to uncertainty chose to defer their entry. We also found a curvilinear relationship between firm size and timing of entry into China. Our findings further indicate that the negative relationship between investment irreversibility and early entry is weaker in the presence of substantial perceived first mover advantages. KEYWORDS entry timing, institutional forces, international market entry, proportional hazards model INTRODUCTION A firm considering entry into a new geographical market must decide when to enter that market. A substantial number of studies have shown that the entry timing choice has important implications for a firm’s post-entry performance in the market (e.g., Isobe et al., 2000; Luo, 1998; Luo and Peng, 1998; Mascarenhas, 1992a,b, 1997; Mitchell, 1991; Pan et al., 1999; Song et al., 1999). For instance, it has been often reported that early entrants in new markets achieve greater market shares, but also have higher exit rates (Lieberman and Montgomery, 1998). Given that entry timing is a crucial strategic decision that can impact firm success and survival, it is not surprising that researchers recently have turned to the antecedents pertaining to the timing of a firm’s entry into a new geographical market (Fuentelsaz et al., 2002; Gaba et al., 2002; Mitra and Golder, 2002; Tan and Vertinsky, 1996; Ursacki and Vertinsky, 1992). In general, these pioneering empirical studies have highlighted firm resources as the drivers that determine the timing of new market entry. Firms with superior resources are expected to have Management and Organization Review 3:2 227–254 doi: 10.1111/j.1740-8784.2007.00068.x © 2007 The Authors Journal compilation © 2007 Blackwell Publishing Ltd