Entering a foreign market: Exports, FDI or strategic alliance?

Arbeitspapier

The decision over exports vs. foreign direct investment (FDI) is usually discussed in an extension of the so-called Melitz model where firms with heterogeneous costs compete in a monopolistically competitive industry. The present paper starts from a situation where a potential foreign entrant would be just indifferent between exports and FDI in such a setting. However, by assuming oligopolistic interaction, strategic considerations are also taken into account. It is shown how the strategic impact of lower marginal cost makes FDI more attractive in a Cournot setting while exports are preferable under price competition in a market with differentiated goods. Beyond that it is also explored how a strategic alliance with a local incumbent could be a superior alternative for market entry.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Volkswirtschaftliche Diskussionsbeiträge ; No. 2018,5

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Monopolization; Horizontal Anticompetitive Practices
• Thema: Entry strategies ; Trade ; FDI ; Alliances ; Oligopoly

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Morasch, Karl
• Ereignis: Veröffentlichung
• (wer): Universität der Bundeswehr München, Fachgruppe für Volkswirtschaftslehre
• (wo): Neubiberg
• (wann): 2018

Weitere Informationen

• Handle: http://hdl.handle.net/10419/191599
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ