TY - JOUR
T1 - Playing away to win at home
AU - Leahy, Dermot
AU - Pavelin, Stephen
PY - 2008/9
Y1 - 2008/9
N2 - 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 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.
AB - 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 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.
UR - http://www.scopus.com/inward/record.url?scp=48249116692&partnerID=8YFLogxK
UR - http://dx.doi.org/10.1016/j.jeconbus.2007.08.001
U2 - 10.1016/j.jeconbus.2007.08.001
DO - 10.1016/j.jeconbus.2007.08.001
M3 - Article
SN - 0148-6195
VL - 60
SP - 455
EP - 468
JO - Journal of Economics and Business
JF - Journal of Economics and Business
IS - 5
ER -