Oligopolistic competition and foreign direct investment

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Oligopolistic competition and foreign direct investment

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dc.contributor.author Hoenen, Anne Kristin
dc.contributor.author Hansen, Michael W.
dc.date.accessioned 2009-12-01
dc.date.accessioned 2009-12-01T14:13:38Z
dc.date.available 2009-12-01T14:13:38Z
dc.date.issued 2009-12-01
dc.identifier.isbn 9788792111104
dc.identifier.uri http://hdl.handle.net/10398/7956
dc.description.abstract The contemporary literature on foreign direct investment (FDI) has to some extent ’forgotten’ a key insight of the early FDI literature, namely that FDI to a large extent is driven by strategic interaction of firms in oligopolistic industries. Instead the FDI literature has focused, at first on FDI as a way of generating efficiency in cross border transactions, and later on FDI as a way to effectively leverage and build capabilities across borders. These efficiency and capabilities perspectives on FDI may have been adequate in a situation where global competition still was in its infancy. However, in recent years, we have seen the emergence of truly global oligopolies, e.g. in electronics, aerospace, aviation, software, steel, automotive, construction, brewing, etc. These oligopolistic industries have been consolidated through massive waves of cross border M&As in the second half of the 90s and from 2003-2007. We argue that in such industries it is not adequate to analyze FDI only in terms of efficiency or resource leverage; FDI must also be understood in terms of its contribution to the global strategic positioning of the investing firm. The paper seeks to re-discover’ the oligopolistic competition perspective, drawing on the early insights of the Hymer-Kindleberger-Caves tradition as well as on the recent Strategic Management literature, but bringing these into the context of globalization. It is argued that global strategic interaction in oligopolistic industries is manifest in well known FDI phenomena such as follow-the-leader, client follower, and first-mover. While the paper attempts no formal testing, evidence indicative of oligopolistic competition motivated FDI is presented, e.g. from the recent cross border M&A waves and from the recent surge of FDI in emerging markets. en_US
dc.format.extent 29 s. en_US
dc.language eng en_US
dc.publisher Centre for Business and Development Studies en_US
dc.relation.ispartofseries CBDS Working Paper Series;Nr. 10, 2009
dc.subject.other Oligopolistic Competition en_US
dc.subject.other Foreign Direct Investment en_US
dc.subject.other Strategic Management en_US
dc.title Oligopolistic competition and foreign direct investment en_US
dc.type wp en_US
dc.accessionstatus modt09dec01 mm en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Centre for Business and Development Studies en_US
dc.contributor.departmentshort CBDS en_US
dc.contributor.departmentuk Centre for Business and Development Studies en_US
dc.contributor.departmentukshort CBDS en_US
dc.idnumber 9788792111104 en_US
dc.publisher.city Frederiksberg en_US
dc.publisher.year 2009 en_US
dc.title.subtitle (Re) Integrating the strategic management perspective in the theory of multinational corporations en_US


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