Market entry strategy of knowledge intensive service firms: the case of Australian transnational universities

As examples of knowledge-intensive services, Australian universities have pursued non-equity entry modes to deliver courses transnationally. Through a case study investigation of four Australian universities, this study evaluates the perceptions and entry decisions of university managers. From the market selection, entry mode and higher education literature, a conceptual model, embedded with 4 propositions, is presented. The model sees market selection and entry mode as inter-dependent decisions which are influenced by manager and university motives, risk-aversity, and host government constraints in a gradual process of internationalisation. Among our key findings are that profitability is not a driver for university internationalisation and, due to a culture of risk-aversity, universities prefer zero-equity modes unless risk can be minimised or accommodated through suitable hedging strategies.