Abstract
Whereas prior research highlights that firms rely on competitors’ actions and market resource munificence in market entry decisions, the effect of policy availability remains overlooked. In this study, we explore the direct and indirect effects of policy availability on the likelihood of novel market entry. Grounded in the behavioral theory of the firm, we hypothesize that policy availability in a novel market: (1) increases the firm’s likelihood of entry into this market and (2) positively moderates the inverted U-shaped relationship between the number of competitors active in this market and the likelihood of entry into it. Analyzing rich data on the market entry activities of 134 wind turbine manufacturers over a 25- year time period, we largely find empirical support for our predictions. Our study offers new theoretical insights about how search heuristics, and policy availability in particular, influence market entry decisions."