The emergence of the financial technology (Fintech) sector in Southeast Asia has captured the attention of global inventors in the last decade. To strategically penetrate this explorable market, international managers ought to decide which penetrating modes they adopt. This study examines the decision-making process between alliances and acquisitions of international firms into the Fintech industries of emerging Southeast Asian countries: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. Using a binomial regression model, we analyze the impact of internal and external aspects on penetrating mode choices, including business expansion, internationalization, institutional knowledge, and formal institutional distance. By analyzing data from a total of 29 countries from 2010/01/01 to 2023/03/31, our findings indicate that firms pursuing horizontal expansion prefer acquisitions to gain market share and eliminate competition, while those engaged in vertical expansion opt for alliances to access new resources and enhance core operations. Interestingly, a high degree of internationalization does not necessarily drive a preference for alliances. Instead, firms with better institutional knowledge of the target country tend to choose acquisitions, leveraging their understanding of local practices and information asymmetry. Additionally, formal institutional distance does not significantly influence the choice of alliances over acquisitions.

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