Playing away to win at home

Dermot Leahy, Stephen Pavelin

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)455-468
Number of pages14
JournalJournal of Economics and Business
Volume60
Issue number5
DOIs
Publication statusPublished - Sep 2008

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