FDI as a signal of quality
AbstractA new-product firm's entry strategy into foreign markets is considered. We show that, when product quality is unknown, a new-product firm may choose FDI over exporting to signal quality even if exporting is more cost-effective.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 103 (2009)
Issue (Month): 3 (June)
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Web page: http://www.elsevier.com/locate/ecolet
Foreign direct investment (FDI) Exporting Unknown quality Signaling;
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Handbook of Industrial Organization,
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American Economic Review,
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- Wolfgang Mayer, 1984. "The Infant-Export Industry Argument," Canadian Journal of Economics, Canadian Economics Association, vol. 17(2), pages 249-69, May.
- Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004.
"Export versus FDI with Heterogeneous Firms,"
3229098, Harvard University Department of Economics.
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