Advanced Search
MyIDEAS: Login to save this paper or follow this series

Technological capabilities and cost efficiency as antecedents of foreign market entry

Contents:

Author Info

  • Cesaroni, Fabrizio

    ()
    (Universidad Carlos III de Madrid, and Istituto di Management, Scuola Superiore Sant'Anna)

  • Giarratana, Marco S.

    ()
    (Universidad Carlos III de Madrid)

  • Martínez-Ros, Ester

    ()
    (Universidad Carlos III de Madrid, and UNU-MERIT)

Abstract

This work explores which factors increase firms' propensity to enter into international markets. The study draws on the resource-based view and assesses the effect played by firms' technological capabilities and cost structures on entry. While many research papers consider those two factors to be independent one from the other, this study focuses on their interactive effect. Empirical analysis covers the whole population of Spanish pharmaceutical firms over the period 1995-2004. By using data on trademarks filed at the United States Patent and Trademark Office (USPTO), the study identifies those firms that have entered the US market with branded products. Then, the study uses a hazard model to empirically estimate which firms' resources and capabilities affect the probability of entry. Results show that firms can maximize the likelihood of entry in foreign markets by pursuing hybrid competitive strategies that combine together scope economies and cost efficiency.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.merit.unu.edu/publications/wppdf/2012/wp2012-049.pdf
Download Restriction: no

Bibliographic Info

Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 049.

as in new window
Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:unm:unumer:2012049

Contact details of provider:
Postal: P.O. Box 616, 6200 MD Maastricht
Phone: (31) (0)43 3883875
Fax: (31) (0)43 3216518
Web page: http://www.merit.unu.edu/
More information through EDIRC

Related research

Keywords: Innovation and R&D; Patents; Trademarks; Competitive Advantage; Firm-Specific Advantages; Foreign Market Entry.;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan, vol. 11(1), pages 9-31, March.
  2. Henderson, Rebecca. & Cockburn, Iain., 1994. "Measuring competence? : exploring firm effects in pharmaceutical research," Working papers, Massachusetts Institute of Technology (MIT), Sloan School of Management 3712-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  3. Alessandro STERLACCHINI, 1998. "Do innovative activities matter to small firms in non-R&D-intensive industries? An application to export performances," Working Papers, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali 109, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  4. Vibha Gaba & Yigang Pan & Gerardo R Ungson, 2002. "Timing of Entry in International Market: An Empirical Study of U.S. Fortune 500 Firms in China," Journal of International Business Studies, Palgrave Macmillan, vol. 33(1), pages 39-55, March.
  5. Leonardo Becchetti & Stefania Rossi, 2000. "The Positive Effect of Industrial District on the Export Performance of Italian Firms," Review of Industrial Organization, Springer, Springer, vol. 16(1), pages 53-68, February.
  6. Zvi Griliches, 1990. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc.
  7. Bianchi, Constanza C. & Ostale, Enrique, 2006. "Lessons learned from unsuccessful internationalization attempts: Examples of multinational retailers in Chile," Journal of Business Research, Elsevier, Elsevier, vol. 59(1), pages 140-147, January.
  8. Chen, Tain-Jy, 2006. "Liability of foreignness and entry mode choice: Taiwanese firms in Europe," Journal of Business Research, Elsevier, Elsevier, vol. 59(2), pages 288-294, February.
  9. Mendonca, Sandro & Pereira, Tiago Santos & Godinho, Manuel Mira, 2004. "Trademarks as an indicator of innovation and industrial change," Research Policy, Elsevier, Elsevier, vol. 33(9), pages 1385-1404, November.
  10. Cantwell, John & Piscitello, Lucia, 2000. "Accumulating Technological Competence: Its Changing Impact on Corporate Diversification and Internationalization," Industrial and Corporate Change, Oxford University Press, vol. 9(1), pages 21-51, March.
  11. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, Elsevier, vol. 47(1), pages 1-25, February.
  12. Andrew B. Bernard & J. Bradford Jensen, 2001. "Why Some Firms Export," NBER Working Papers 8349, National Bureau of Economic Research, Inc.
  13. repec:fth:harver:1473 is not listed on IDEAS
  14. C Patrick Woodcook & Paul W Beamish & Shige Makino, 1994. "Ownership-Based Entry mode Strategies and International Performance," Journal of International Business Studies, Palgrave Macmillan, vol. 25(2), pages 253-273, June.
  15. Sanjeev Agarwal & Sridhar N Ramaswami, 1992. "Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internationalization Factors," Journal of International Business Studies, Palgrave Macmillan, vol. 23(1), pages 1-27, March.
  16. Ulrich Schmoch, 2003. "Service marks as novel innovation indicator," Research Evaluation, Oxford University Press, vol. 12(2), pages 149-156, August.
  17. Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 19(1), pages 155-74, February.
  18. Yui Kimura, 1989. "Firm-Specific Strategic Advantages and Foreign Direct Investments Behavior of Firms: The Case of Japanese Semiconductor Firms," Journal of International Business Studies, Palgrave Macmillan, vol. 20(2), pages 296-314, June.
  19. Peter J Buckley & Mark C Casson, 1998. "Analyzing Foreign Market Entry Strategies: Extending the Internalization Approach," Journal of International Business Studies, Palgrave Macmillan, vol. 29(3), pages 539-561, September.
  20. Wakelin, Katharine, 1998. "Innovation and export behaviour at the firm level," Research Policy, Elsevier, Elsevier, vol. 26(7-8), pages 829-841, April.
  21. Chiung-Hui Tseng & Patriya Tansuhaj & William Hallagan & James McCullough, 2007. "Effects of firm resources on growth in multinationality," Journal of International Business Studies, Palgrave Macmillan, vol. 38(6), pages 961-974, November.
  22. Mascarenhas, Briance, 1997. "The order and size of entry into international markets," Journal of Business Venturing, Elsevier, vol. 12(4), pages 287-299, July.
  23. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan, vol. 19(1), pages 1-31, March.
  24. Lin, Feng-Jyh, 2010. "The determinants of foreign direct investment in China: The case of Taiwanese firms in the IT industry," Journal of Business Research, Elsevier, Elsevier, vol. 63(5), pages 479-485, May.
  25. Shige Makino & Chung-Ming Lau & Rhy-Song Yeh, 2002. "Asset-Exploitation Versus Asset-Seeking: Implications for Location Choice of Foreign Direct Investment from Newly Industrialized Economies," Journal of International Business Studies, Palgrave Macmillan, vol. 33(3), pages 403-421, September.
  26. Quintana-Garci­a, Cristina & Benavides-Velasco, Carlos A., 2008. "Innovative competence, exploration and exploitation: The influence of technological diversification," Research Policy, Elsevier, Elsevier, vol. 37(3), pages 492-507, April.
  27. Basile, Roberto, 2001. "Export behaviour of Italian manufacturing firms over the nineties: the role of innovation," Research Policy, Elsevier, Elsevier, vol. 30(8), pages 1185-1201, October.
  28. Jean-Fran�ois Hennart, 2009. "Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets," Journal of International Business Studies, Palgrave Macmillan, vol. 40(9), pages 1432-1454, December.
  29. Cantwell, John & Janne, Odile, 1999. "Technological globalisation and innovative centres: the role of corporate technological leadership and locational hierarchy1," Research Policy, Elsevier, Elsevier, vol. 28(2-3), pages 119-144, March.
  30. Walter Kuemmerle, 1999. "The Drivers of Foreign Direct Investment into Research and Development: An Empirical Investigation," Journal of International Business Studies, Palgrave Macmillan, vol. 30(1), pages 1-24, March.
  31. B Kogut & U Zander, 2003. "Knowledge of the firm and the evolutionary theory of the multinational corporation," Journal of International Business Studies, Palgrave Macmillan, vol. 34(6), pages 516-529, November.
  32. Jose I Galan & Javier Gonzalez-Benito & Jose A Zu�iga-Vincente, 2007. "Factors determining the location decisions of Spanish MNEs: an analysis based on the investment development path," Journal of International Business Studies, Palgrave Macmillan, vol. 38(6), pages 975-997, November.
  33. Brouwer, E. & Kleinknecht, Alfred, 1993. "Technology and a firm's export intensity: The need for adequate innovation measurement," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-5662243, Tilburg University.
  34. Pehrsson, Anders, 2008. "Strategy antecedents of modes of entry into foreign markets," Journal of Business Research, Elsevier, Elsevier, vol. 61(2), pages 132-140, February.
  35. Lefebvre, Elisabeth & Lefebvre, Louis A & Bourgault, Mario, 1998. " R&D-Related Capabilities as Determinants of Export Performance," Small Business Economics, Springer, Springer, vol. 10(4), pages 365-77, June.
  36. Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, Elsevier, vol. 9(2), pages 163-190, April.
  37. Gans, Joshua S. & Stern, Scott, 2003. "The product market and the market for "ideas": commercialization strategies for technology entrepreneurs," Research Policy, Elsevier, Elsevier, vol. 32(2), pages 333-350, February.
  38. Andrea Fosfuri & Marco S. Giarratana, 2004. "Product Strategies And Startups’ Survival In Turbulent Industries: Evidence From The Security Software Industry," Business Economics Working Papers, Universidad Carlos III, Departamento de Economía de la Empresa wb044816, Universidad Carlos III, Departamento de Economía de la Empresa.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:unm:unumer:2012049. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ad Notten).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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