IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v40y2019i5p559-568.html
   My bibliography  Save this article

To lead or to wait? An application to internationalization strategies under demand uncertainty

Author

Listed:
  • Maja Barac
  • Rafael Moner‐Colonques

Abstract

We examine the exports versus foreign direct investment (FDI) decision under demand uncertainty for an asymmetric cost duopoly. One of the firms can lead entry before demand realization or retain flexibility enjoying an informational advantage. When the time value of information is small and for sufficiently low investment costs, follow‐the‐leader behavior in FDI arises. Relatively high investment (fixed) costs result in follow‐the‐leader exporting behavior. When the time value of information becomes significant, the potential leader will opt for a wait‐and‐see strategy. For intermediate values of investment costs, the efficient firm invests, while the rival chooses to export.

Suggested Citation

  • Maja Barac & Rafael Moner‐Colonques, 2019. "To lead or to wait? An application to internationalization strategies under demand uncertainty," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(5), pages 559-568, July.
  • Handle: RePEc:wly:mgtdec:v:40:y:2019:i:5:p:559-568
    DOI: 10.1002/mde.3026
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.3026
    Download Restriction: no

    File URL: https://libkey.io/10.1002/mde.3026?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maja Barac & Rafael Moner‐Colonques, 2022. "Leadership in internationalization strategies," Manchester School, University of Manchester, vol. 90(3), pages 293-318, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:40:y:2019:i:5:p:559-568. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.