Market structure and the multinational enterprise: a game-theoretic approach

Graham, Edward M.

doi:10.4337/9781843766995.00012

Cited by 21 publications

(27 citation statements)

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“…The game theoretic approach to industrial organization has provided a more strategic approach to FDI (Graham, 1998). In these models (Horstmann and Markusen, 1992;Jacquemin, 1989;Smith, 1986) comparative advantages are not considered as exogenously given, and multinational firms are not interested only in exploiting them but rather in augmenting and protecting them.…”

Section: The Host Country Determinants Of Fdimentioning

confidence: 99%

The Determinants of Foreign Direct Investment in the CEECs: New evidence from sectoral patterns

Resmini

2000

Economics of Transition

303

188

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This paper investigates the determinants of European Union FDI in the CEECs at sectoral level. The aim is to understand whether and to what extent FDI undertaken in different sectors reacts to the characteristics of the host countries. The analysis is based on a dataset created specifically for this purpose. It concentrates on the manufacturing sectors, classified according to the Pavitt taxonomy. Firstly, data summarizing the recent trend of FDI in the CEECs is presented and then empirical evidence given to account for differences between sectors. The estimated model is a generalization of a three-way fixed effect model incorporating 'classic' variables, such as labour costs as well as country-specific variables, i.e., the stage reached in the transition process. The results confirm the presence of heterogeneity at sector level.JEL classification: F15, F23, P20, C23.

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Section: The Host Country Determinants Of Fdimentioning

confidence: 99%

The Determinants of Foreign Direct Investment in the CEECs: New evidence from sectoral patterns

Resmini

2000

Economics of Transition

303

188

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“…Game theory has also been used to explain firms' strategic responses to their competitors' actions (Chen and MacMillan, 1992;Ghemawat and McGahan, 1998;Porter and Spence, 1982), to account for the development of entrepreneurial behaviors (Arend, 1999), for reputation building (Weigelt and Camerer, 1988), or for the stability of alliances (Parkhe, 1993). In the international business literature, game theory has been used to explain the decision for firms to become multinational (Graham, 1998;Veugelers, 1995) and even to show how political and legal strategies could be integrated with international strategies, as in the case of Kodak vs. Fuji (Baron, 1997). 7 Game theory has actually been widely used in the field of international economics to study questions such as 'Should a government control access of foreign firms to domestic markets?'…”

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confidence: 99%

Global and political strategies in deregulated industries: the asymmetric behaviors of former monopolies

Bonardi

2003

Strategic Management Journal

114

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In deregulated industries former monopolies often adopt asymmetric behaviors: these firms impede the entry of foreign competitors in their home market, especially using defensive political strategies, and, at the same time, aggressively develop international strategies in foreign markets. To account for this behavior, I develop a game theoretic model involving three players: the former monopoly, its home government, and the host government of the country into which the firm wants to enter. I show first that there are in fact different asymmetric strategies that former monopolies can use in such a setting, and that a global strategy cannot always be implemented by those firms because of cooperation issues between the two governments. I also study the conditions under which these issues can be solved and show that this can happen only when the firm develops a political strategy that integrates both defensive and offensive activities. Overall, this paper therefore argues that asymmetric strategies are not always adopted to maintain monopoly rents but are also dictated by the nature of the international relationships between the governments involved.

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“…In other words, foreign direct investment could be driven by either "market pull" or considerations of relative efficiency. 14 14 In an earlier article (Graham 1998), I have shown that in an oligopoly context, and contrary to much of the literature on FDI, it is not necessarily the most efficient firm that becomes a foreign direct investor.…”

Section: Cross-border Investmentmentioning

confidence: 80%

Market structure and the multinational enterprise: a game-theoretic approach

Cited by 21 publications

References 0 publications

The Determinants of Foreign Direct Investment in the CEECs: New evidence from sectoral patterns

The Determinants of Foreign Direct Investment in the CEECs: New evidence from sectoral patterns

Global and political strategies in deregulated industries: the asymmetric behaviors of former monopolies

Subsidies, Market Closure, Cross-Border Investment, And Effects On Competition: The Case Of Fdi In The Telecommunications Sector

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