Playing away to win at home
This paper presents a model of the interaction between two rival firms based in the same country. Each firm must decide how to serve a foreign market (export or foreign production) and how much to invest in a corporate-wide asset that reduces production costs and/or augments the willingness-to-pay for their product. In this scenario, the firms’ foreign direct investment decisions are interdependent. Furthermore, strategic motives for FDI relate not to a firm’s domestic, as well as foreign, market profits. One possibility is that a firm sets up overseas production even though its foreign market profits would be higher by exporting.
|Date of creation:||Dec 2006|
|Date of revision:|
|Contact details of provider:|| Postal: UCD, Belfield, Dublin 4|
Fax: +353-1-283 0068
Web page: http://www.ucd.ie/economics
More information through EDIRC
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.:
- Maria Petit & Francesca Sanna-Randaccio, 1998. "Technological innovation and multinational expansion: A two-way link?," Journal of Economics, Springer, vol. 68(1), pages 1-26, February.
- Archibugi, Daniele & Michie, Jonathan, 1995. "The Globalisation of Technology: A New Taxonomy," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 121-40, February.
- Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 155-74, February.
- Head, K. & Mayer, T. & Ries, J., 2000.
"Revisiting Oligopolistic Reaction : Are FDI Decisions Strategic Complements?,"
Papiers d'Economie MathÃ©matique et Applications
2000.49, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Keith Head & Thierry Mayer & John Ries, 2002. "Revisiting Oligopolistic Reaction : Are FDI Decisions Strategic Complements," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00267447, HAL.
- Head, Keith & Mayer, Thierry & Ries, John, 2002. "Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements?," CEPR Discussion Papers 3327, C.E.P.R. Discussion Papers.
- Head, K. & Mayer, T. & Ries, J., 2001. "Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements," Papiers d'Economie MathÃ©matique et Applications 2001.49, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Zander, Ivo, 1997. "Technological diversification in the multinational corporation--historical evolution and future prospects," Research Policy, Elsevier, vol. 26(2), pages 209-227, May.
- Laszlo Tihanyi & David A Griffith & Craig J Russell, 2005. "The effect of cultural distance on entry mode choice, international diversification, and MNE performance: a meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 270-283, May.
- John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(1), pages 1-31, March.
- Horstmann, Ignatius J. & Markusen, James R., 1992. "Endogenous market structures in international trade (natura facit saltum)," Journal of International Economics, Elsevier, vol. 32(1-2), pages 109-129, February.
- Kuemmerle, Walter, 1999. "Foreign direct investment in industrial research in the pharmaceutical and electronics industries--results from a survey of multinational firms," Research Policy, Elsevier, vol. 28(2-3), pages 179-193, March.
- Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 305-36, Fall.
- Petit, Maria-Luisa & Sanna-Randaccio, Francesca, 2000. "Endogenous R&D and foreign direct investment in international oligopolies," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 339-367, February.
- Teece, David J., 1986. "Transactions cost economics and the multinational enterprise An Assessment," Journal of Economic Behavior & Organization, Elsevier, vol. 7(1), pages 21-45, March.
- Smith, Alasdair, 1987. "Strategic investment, multinational corporations and trade policy," European Economic Review, Elsevier, vol. 31(1-2), pages 89-96.
- Hongxin Zhao & Yadong Luo & Taewon Suh, 2004. "Transaction cost determinants and ownership-based entry mode choice: a meta-analytical review," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(6), pages 524-544, November.
- Leahy, Dermot & Pavelin, Stephen, 2003. "Follow-my-leader FDI and tacit collusion," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 439-453, March.
When requesting a correction, please mention this item's handle: RePEc:ucn:wpaper:200626. 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: (Nicolas Clifton)
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.