Strategic investments by US firms in transition economies
Studies in international business have considered both theoretical and empirical analyses of investment strategies by multinational firms in transition economies. However, there is scant research on the impact of firm-specific factors on the likelihood, timing, and mode-of-entry decisions in these economies. We provide evidence on three aspects of the strategic decisions by US firms to invest in transition economies. First, we find that firms entering the region have greater advertising intensity and sales growth than industry peers that did not enter the region, suggesting that market-seeking considerations motivate expansion. Second, we find that earlier entry is undertaken by firms with fewer industry competitors and higher sales growth, suggesting that the desire to secure market share ahead of competitors motivates entry timing. Finally, we investigate the choice of entry mode into the region, and find that firms from concentrated industries are more likely to enter the region with high-equity commitment, consistent with market-seeking motives. We also find that firms incorporate the degree of progress with market-oriented reforms in making decisions concerning entry timing and mode. Journal of International Business Studies (2008) 39, 249–266. doi:10.1057/palgrave.jibs.8400334
Year of publication: |
2008
|
---|---|
Authors: | Paul, Donna L ; Wooster, Rossitza B |
Published in: |
Journal of International Business Studies. - Palgrave Macmillan, ISSN 0047-2506. - Vol. 39.2008, 2, p. 249-266
|
Publisher: |
Palgrave Macmillan |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
US companies in transition economies: wealth effects from expansion between 1987 and 1999
Wooster, Rossitza B, (2006)
- More ...