A Model of Competition Between Multinational Firms
This study focuses on the theory of how multinational firms choose their entry modes between alternative options (i.e., trade, greenfield investment, or acquisition). In a comprehensive model of strategic decision-making with more than one multinational firm, it delineates how a multinational firm's entry mode influences a rival multinational firm's market entry behavior and how exogenous factors (e.g., market size, firms' production cost, per-unit trade cost and fixed investment cost) affect the optimal entry modes. The main finding of the study is that competition among multinational firms substantially affects their optimal entry modes such that competition implies different entry modes compared to no competition.
|Date of creation:||Oct 2009|
|Date of revision:||Oct 2009|
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- Neary, J. Peter, 2009.
"Trade costs and foreign direct investment,"
International Review of Economics & Finance,
Elsevier, vol. 18(2), pages 207-218, March.
- J. Peter Neary, 2005. "Trade costs and foreign direct investment," Working Papers 200512, School of Economics, University College Dublin.
- Neary, J Peter, 2006. "Trade Costs and Foreign Direct Investment," CEPR Discussion Papers 5933, C.E.P.R. Discussion Papers.
- Haller, Stefanie A., 2009. "The impact of multinational entry on domestic market structure and investment," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 52-62, January.
- Bjorvatn, Kjetil, 2004. "Economic integration and the profitability of cross-border mergers and acquisitions," European Economic Review, Elsevier, vol. 48(6), pages 1211-1226, December.
- Barros, Pedro Pita, 1998. "Endogenous mergers and size asymmetry of merger participants," Economics Letters, Elsevier, vol. 60(1), pages 113-119, July.
- Norback, Pehr-Johan & Persson, Lars, 2004. "Privatization and foreign competition," Journal of International Economics, Elsevier, vol. 62(2), pages 409-416, March.
- Norbäck, Pehr-Johan & Persson, Lars, 2001. "Privatization and Foreign Competition," CEPR Discussion Papers 2735, C.E.P.R. Discussion Papers.
- Persson, Lars & Norbäck, Pehr-Johan, 2001. "Privatization and Foreign Competition," Working Paper Series 545, Research Institute of Industrial Economics, revised 02 Feb 2001.
- Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 98(2), pages 185-199.
- James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
- Horn, Henrik & Persson, Lars, 2001. "The equilibrium ownership of an international oligopoly," Journal of International Economics, Elsevier, vol. 53(2), pages 307-333, April.
- Horn, Henrik & Persson, Lars, 1999. "The Equilibrium Ownership of an International Oligopoly," CEPR Discussion Papers 2302, C.E.P.R. Discussion Papers.
- Horn, Henrik & Persson, Lars, 1999. "The Equilibrium Ownership of an International Oligopoly," Working Paper Series 515, Research Institute of Industrial Economics.
- Thomas Borek & Stefan Buehler & Armin Schmutzler, 2004. "Mergers under Asymmetric Information ï¿½ Is there a Lemons Problem?," SOI - Working Papers 0408, Socioeconomic Institute - University of Zurich.
- Beata S. Javorcik & Kamal Saggi, 2010. "Technological Asymmetry Among Foreign Investors And Mode Of Entry," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 415-433, 04.
- Javorcik, Beata Smarzynska & Saggi, Kamal, 2004. "Technological asymmetry among foreign investors and mode of entry," Policy Research Working Paper Series 3196, The World Bank.
- Pehr-Johan Norbäck & Lars Persson, 2008. "Globalization and profitability of cross-border mergers and acquisitions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(2), pages 241-266, May.
- Eicher, Theo & Kang, Jong Woo, 2005. "Trade, foreign direct investment or acquisition: Optimal entry modes for multinationals," Journal of Development Economics, Elsevier, vol. 77(1), pages 207-228, June.
- Theo Eicher & Jong Woo Kang, 2004. "Trade, Foreign Direct Investment or Acquisition: Optimal Entry Modes for Multinationals," CESifo Working Paper Series 1174, CESifo Group Munich.
- Mukherjee, Arijit & Sengupta, Sarbajit, 2001. "Joint Ventures versus Fully Owned Subsidiaries: Multinational Strategies in Liberalizing Economies," Review of International Economics, Wiley Blackwell, vol. 9(1), pages 163-180, February. Full references (including those not matched with items on IDEAS)
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