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Efficient distribution has a considerable influence on the sales volume of firms, and thus affects the firms' research and development (R&D) activities. This paper analyzes the relationship between competition in the transport sector and R&D of firms using the transportation services. We consider a two-region reciprocal market in which firms invest in cost-reducing R&D and use carriers that engage in price competition to supply their products to the foreign market. We show that, corresponding to the degree of R&D spillover, a transport cost (or price) reduction due to an increase in the number of carriers can increase or decrease the firms' R&D investments. This result is consistent with the finding in previous studies that trade liberalization can hinder R&D. Because inefficient firms lead to high prices in the market, an increase in the number of carriers may reduce consumer surplus. We further discuss a case in which firms have monopsony power in transportation services and show that our main results are robust to the extension.

When corruption becomes a significant barrier to develop domestic business, do firms resort to exporting as a solution? In other words, is there a ‘shelter effect’ of exporting? We build a simple model to analyse the effects of corruption on firms’ domestic versus foreign market sales. The model predicts that when corruption increases the cost of domestic sales, large firms increase exports relative to domestic sales, whereas small firms do the opposite. Using data from the World Bank Enterprise Surveys, we provide supportive evidence to these predictions. We also find the ‘shelter effect’ to be weaker for politically connected firms.

This study examines the effect of external credit on the export decision of manufacturing firms in Nigeria using the 2014 World Bank Enterprise Surveys data. The paper employs an instrumental variable (IV) probit model to assess the empirical relations. The results reveal that both bank and nonbank credit positively and significantly drive firms' foreign market entry decision in Nigeria. Policy interventions should therefore be directed at creating an enabling environment that would stimulate an increase in the breadth and depth of financial presence across Nigeria. This may be done through offering special tax reliefs to banks and nonbank financial institutions that seek to expand. Banks should also be encouraged to invest in innovative strategies such as branchless banking and mobile banking which have the capability to increase access without the huge cost outlays for physical infrastructure. They should further be encouraged to develop special ‘export credit packages’ for smaller but viable firms that are willing to go into exporting but lack the necessary collateral, and create special ‘task forces’ to monitor and redeem such loans when they fall due. The Government should also channel ‘export development credit’ through banks and nonbank financial institutions to manufacturing firms in Nigeria for efficient allocation, monitoring and collection.

This article uses firm × national market export and import data for all Swedish private sector firms for 1997–2014 to examine the firm-level contribution of trade and foreign ownership to the correlation between Swedish value added growth and partner country gross domestic product (GDP) growth. Export and import links increase the firm-level correlation but net out for firms that both export to and import from the same market, evidence that this type of ‘natural hedging’ can help reduce a firm's exposure to foreign economic shocks. We proceed to aggregate the firm-level results to the whole economy and find that severing firm-level ties with a foreign market is predicted to lower the correlation between Swedish value added growth and foreign GDP growth from 0.72 to 0.64 on average. Gabaix's ‘granularity’ of trade is central to this result: if all firms are given equal weight overall correlations are essentially unaffected by severing firm level ties. Natural hedging is quantitatively important at the firm level and also plays a role in limiting overall comovements.

During the period spanning independence in 1822 to mid-century, Brazil’s south-east shifted from specializing in the export of cane sugar to coffee. This article explores the mechanism underlying this shift by exploiting a wealth of new monthly data on the Brazilian and international coffee and cane sugar markets during the period 1827– 40. It argues that the timing of the coffee boom was driven by a rapid increase in foreign market potential associated with the abolition of the tariff on coffee in the US. It estimates that American tariff reform served to increase coffee exports and African slave imports by around one-fifth. American firms, wi th in direct li nks to th e slave trade, rapidly became major players in the export market in Rio de Janeiro, while non-American firms, t raditionally s pecialized in c ontinental European destinations, turned their sights on the American market.

This paper investigates the effect of competition in both the domestic and foreign markets on firm productivity and export decisions using firm level data from 139 countries. Using a Sample Selection Endogenous Treatment (SSET) Poisson model that tackles both the issue of endogenous sample selection and endogenous treatment at the same time, we document robust evidence that strong competition in the domestic market propels firms to be more productive, and rising domestic competition increases firms’ propensity to export. However, firms’ export intensity, i.e. how much they export, is not directly influenced by competition in the domestic market. Moreover, lower competition in the foreign market increases the propensity of domestic firms to export, enlarging the set of exporting firms to firms with relatively smaller export amount.

This paper sets up a two‐country model in which there is one domestic manufacturer authorising its product to a distributor in the foreign country. The distributor can sell the product not only to its own market (i.e., the foreign market) but also back to the domestic market. The latter is called parallel trade (PT). The paper investigates the effects of PT on the profits of the manufacturer and social welfare if the domestic market structure is endogenously determined. It is found that PT should be encouraged rather than banned as it increases not only the profits of the manufacturer but also the welfare of both the domestic and the foreign countries.

Brazil is a place for long-term investments, but it is losing its attractiveness to the foreign market while factors such as location and ease of implementation of the business are the only determinants of the investor. Basic education, political stability, and fiscal reforms have been identified as areas having implications for policy making.

This paper examines how cross-border differences in the stringency of bank regulations affect U.S. banks’ international activities. The analysis relies on a unique bank-level dataset on the globally most active U.S. banks’ balance sheet as well as their cross-border, foreign affiliate lending and foreign market entry choices in 82 foreign countries in the 2003-2013 period. Results show that U.S. banks are significantly more likely to enter foreign markets with relatively laxer bank capital and disclosure requirements, and exit foreign markets with relatively stricter deposit insurance schemes and more restrictions on activities. Banks substitute away from foreign affiliate lending (via subsidiaries in the foreign country) towards cross-border lending (originating from the U.S.) in foreign countries with more powerful and independent bank regulators and limits on activities.

Within a standard model of international trade with heterogenous firms and two asymmetric countries, we derive sufficient conditions for monotone comparative statics (MCS) for the industry composition. This model outcome is defined as first-order stochastic dominance shifts in the equilibrium distributions of all activities across active firms. MCS for the industry composition occurs in a country that experiences a decline in its costs of serving the foreign market and meanwhile experiences an increase in its level of competition. In the other country, the industry-level implications are exactly opposite. These clear industry-level results hold while firms respond asymmetrically to the trade shock.

In this paper we investigate whether new exporter firms have a higher probability of starting to export to the countries where their financing banks have already established their branches. The underlying mechanism we hypothesize is based on the transmission of foreign market knowledge from banks to firms, so as to cut down information barriers to international trade. In those countries where such information is arguably more precious to the firm, we find a significant positive relationship between a firm's probability of beginning to export to one market and the presence in the same market of a branch of the firm's financing bank. Coherently with the mechanism hypothesized, we find a stronger effect for closer firm–bank relationships and when banks have established their branches abroad over a longer time period.

This research examined how domestic consumers respond to an advertisement using brand popularity in a foreign market. By using structural equation modeling, it shows that the consumers’ response can change as a function of three characteristics of brand popularity in a foreign market: (a) expertise of foreign consumers, (b) similarity between domestic consumers and foreign consumers, and (c) animosity to a foreign country. Meanwhile, the similarity effect is found to be stronger for high-preference heterogeneity than low-preference heterogeneity. This research documents the importance of understanding the underlying mechanism to determine the effects of brand popularity in a foreign market on brand attitude and purchase intention.

This study investigates the relationship between home market performance and the choice of foreign market entry mode using survey data and financial statement data for German insurance groups with property–liability business from 1999 to 2011. We develop a dynamic resource-based perspective and argue that strategic transformation is a major motive driving the decisions of insurance groups to internationalize their businesses. Additionally, the more rapid the strategic transformation, the more intense is the choice of market entry mode. Furthermore, our findings corroborate the notion that internationalization has a positive effect on home market performance when insurance groups are able to decrease home market dependence by extending the degree of internationalization.

In order to boost sales in foreign markets and compete with emerging local competitors, global companies from developed countries are realizing that they need to develop products specifically for the local markets. Meanwhile, companies in developing nations are building up their design staff and seeking to establish their own global brands. This recent growth in design activity targeting overseas markets suggests the need for academic research to better understand the phenomenon of design expertise transfer across national borders. The present research explores industrial designers' expertise transfer across cultures with respect to knowledge calibration. Based on the literature on expertise and Shanteau's theory of expert competence, several hypotheses are developed regarding the main effect of culture, and the interaction between culture and expertise level, on design confidence and prediction accuracy. A three-phase experimental study is conducted to test the hypotheses. Results suggest that both expert designers and non-expert designers are poorly calibrated and overconfident. Nonetheless, expert designers are better calibrated when designing products for a foreign market than for their home market. Theoretical and managerial implications are discussed.

With China's growing old-age population and economic presence on the international stage, it has become important to evaluate its domestic and foreign market contribution to medical devices. Medical devices are instruments or apparatuses used in the prevention, rehabilitation, treatment, or knowledge generation with respect to disease or other abnormal conditions. This article provides information drawn from recent publications to describe the current state of the Chinese domestic market for medical devices and to define opportunities for foreign investment potential therein. Recent healthcare reforms implemented to meet rising demand due to an aging and migrating population are having a positive effect on market growth-a global market with a projected growth of 15% per year over the next decade.

Earlier work suggests that the relationship between exports and trade costs and exports and foreign market size is well described by a log-linear functional form. A log-linear relationship between exports and productivity is the underlying workhorse models of trade as well. The same pattern is assumed to hold for domestic sales. How the intensity of R&D affects quality or preferences and productivity, and hence, exports and domestic sales, is less well established. This paper is devoted to estimating the relationship between productivity, R&D and sales to different markets in a flexible, nonparametric way which is embedded in a semiparametric estimation approach. Using French firm-level data, we can confirm a standard log-linear relationship for exports. However, it takes a rather non-linear functional form for domestic sales, suggesting that the data are generated by a potentially different class of models than the one considered traditionally.

Scholars have begun to merge the transaction cost economics and capabilities perspectives to examine outsourcing decisions. Further integrating these perspectives with intermediation theory, we assert that a firm's decision to use an intermediary when entering a foreign market is largely a function of the intermediary's relative capabilities and relative transaction costs (i.e., relative advantage). We hypothesize that the intermediary's relative advantage is influenced by three significantly intertwined exchange conditions: client heterogeneity, intermediary risk, and firm learning. Using a sample of 929 new foreign market initiatives by a global consulting firm, our results support our theory.

Anchoring is a ubiquitous heuristic by which decision makers heavily rely on a piece of information (anchor) that appears prior to a decision. Yet, we know little about its role in strategic decisions. This study considers its influence on acquisition premiums by examining whether a focal premium decision may be anchored on the premium that another firm paid for the acquisition that directly preceded the focal acquisition in the same market because it presents a salient and compatible premium to decision makers. Our results support this premise, particularly when preceding acquisitions happened more recently and were similar in size to the focal deals, when focal deals were in a foreign market, and when acquirers lacked acquisition experience in the target market or had a higher acquisition rate

The article deals with opportunities for developing foreign markets successfully against the background of the cessation of German hard coal extraction by 2018. It discusses close collaboration of joint and individual activities of supplier companies, with the inclusion of associations, organisations, universities and political flanking measures to help out. The German suppliers' strengths include undisputed, distinctive engineering competence which has led to the development of numerous customer-specific product solutions and production series. The products meet very special requirements, from ease of installation and operation right through to endurance. In German supplier companies, the engineering does not end with readiness for production, that is to say the production of an innovative technology. Even where system bids are “from a single source”, companies are increasingly enabling their customers to fulfil very particular, in-demand requirements of function and operability while also improving transparency. Customer wishes and demands for standardised interfaces, training on the product and efficient and sustainable environmental protection (“green mining”) are moreover at the focus of all deliberations today. Increasingly, system solutions are striven for abroad and accentuate German suppliers with global offers all-in-all as something special. Virtually all tasks set can be fulfilled comprehensively and pragmatically on the basis of appropriate references. Despite this, major and costly efforts are called for abroad in order to chalk up valuable orders. Against the background of the specific development of the foreign coal industry, acquisition costs need to be further trimmed, including through synergies, and additional customer benefits must be present. Zielgerichtete Auslandsmarkterschliesung durch neutrale, konzeptionelle Unterstutzung der Bergbauzulieferbrache Der Beitrag beschaftigt sich mit Moglichkeiten fur eine erfolgreiche Auslandmarkterschliesung vor dem Hintergrund der Einstellung der deutschen Steinkohlenforderung bis 2018. Diskutiert werden ein enges Zusammenwirken von Einzel- und Gemeinschaftsaktivitaten individueller Zulieferunternehmen unter Einschluss von Verbanden, Organisationen, Hochschulen und hilfsweise einer politischen Flankierung. Zu den Starken der deutschen Zulieferer gehoren unbestritten ausgepragte Engineering-Kompetenzen, die vielfach zur Entwicklung zahlreicher kundenspezifischer Produktlosungen und Baureihen gefuhrt haben Die Produkte erfullen sehr spezielle Anforderungen von der Montage- und Bedienungsfreundlichkeit bis hin zu Standzeiten. Das Engineering hort in deutschen Zulieferbetrieben nicht mit einer Serienreife bzw. der Produktion einer innovativen Technik auf. Die Unternehmen versetzen zunehmend auch mit Systemangeboten “aus einem Guss” ihre Kunden in der Lage, sehr spezielle und nachgefragte Anforderungen an die Funktion und Bedienbarkeit bei gleichzeitiger Erhohung der Transparenz zu erfullen. Kundenwunsche und -forderungen nach abgestimmten Schnittstellen, Ausbildung am Produkt, bei effizientem und nachhaltigem Schutz der Umwelt (“green mining”) stehen daruber hinaus heute im Mittelpunkt aller Uberlegungen. Systemlosungen werden im Ausland zunehmend angestrebt und akzentuieren deutsche Anbieter mit globalen Angeboten in Summe als etwas Besonderes. Auf der Grundlage entsprechender Referenzen konnen damit nahezu alle Aufgabenstellungen umfassend pragmatisch erfullt werden. Trotzdem bedarf es im Ausland groser und kostenintensiver Anstrengungen, um werthaltige Auftrage zu buchen. Vor dem Hintergrund der spezifischen Entwicklung der auslandischen Kohleindustrie mussen Akquisitionskosten, auch mittels der Nutzung von Synergien weiterhin verschlankt und zusatzliche Vorteile fur Kunden prasent werden.

We study the impact of transfer pricing rules on sales prices, firms’ organizational structure, and consumers’ utility within a two-country monopolistic competition model featuring source-based profit taxes that differ across countries. Firms can either become multinationals, i.e., they serve the foreign market through a fully controlled affiliate; or they can become exporters, i.e., they serve the foreign market by contracting with an independent distributor. Compared to the benchmark cases, where tax authorities are either unable to audit firms or where they are able to audit them perfectly, the use of the OECD’s Comparable Uncontrolled Price (CUP) or Cost-Plus (CP) rule distorts firms’ output and pricing decisions. The reason is that the comparable arm’s length transactions between exporters and distributors, which serve as benchmarks, are not efficient. We show that implementing the CUP or CP rules is detrimental to consumers in the low tax country, yet benefits consumers in the high tax country.

This paper examines the interaction effects of institutional differences in the cognitive, normative, and regulatory domains on cross-border acquisition and alliance formation. Using a sample of 673 cross-border acquisitions and alliances conducted by multinational corporations (MNCs) from the manufacturing sector of six emerging economies (EEs) over the period 1995–2008, we find significant mimicking (cognitive domain) of local firms' choice of ownership modes by EE firms. We also find that regulatory distance (regulatory domain) moderates the mimicking of both foreign and local firms while normative distance does not have any moderating effect. These findings contribute to our understanding of how EE MNCs mimic ownership modes in foreign market entry and how the interaction of this mimetic tendency with other institutional pillars affects these decisions

We argue that the influence of the home country wanes as the firm increases its geographic reach. We introduce the concept of the “home base” to capture the effect of the set of countries in which the firm operates. We expect the dynamic liability of foreignness defined relative to the home base to be a better predictor than the static liability of foreignness defined relative to the home country. We also expect the diversity of foreign experience to increase foreign market entry. We find support for these hypotheses with data on Chinese listed firms investing abroad between 1991 and 2007. Copyright © 2014 John Wiley & Sons, Ltd.

From an organizational learning perspective, we argue that the information signaled by the distribution attributes of foreign investors already operating in a location will influence the entry decisions of later arrivals by affecting their level of confidence in imitating. In the context of foreign investment decisions, the proportion of experienced firms in a location was shown to first increase a follower firm's confidence about imitating them, but then to decrease it, due to anticipated competition. The impact of learning from target organizations also varies with the experience of the learning organization. Data on the location choices of 7,478 manufacturing ventures in China by U.S. firms supported the hypotheses. The results provide a more integrated and nuanced understanding of learning in foreign direct investment. Copyright © 2014 John Wiley & Sons, Ltd.

This article provides the first evidence about pure exporters (i.e. firms exporting all of their output to the foreign market) – a phenomenon overlooked and cannot be explained in the existing literature. It then offers a theoretical analysis of the existence and behaviour of pure exporters. In particular, pure exporters arise when the export market is sufficiently large – a situation more likely to hold in developing countries as opposed to large developed countries, and their productivity levels are above those of nonexporters, but below those of firms having both domestic sales and export. These theoretical predictions are borne out in a data of Chinese manufacturing firms for the period of 1998–2005.

In this study, we examine how differences in environmental regulation characteristics are linked to multinational corporations’ (MNCs) foreign market entry (FME) investments decisions around the world. We rely on a data set with 29,303 observations from 94 European Fortune Global 500 companies operating across 77 countries during the period 2001‐2007. We found that MNCs are more likely to enter countries with more certain—i.e., clearer and more stable—environmental regulations than those of their home countries. Results also suggest that there is a higher level of MNC entry into foreign countries with environmental regulations that are more stringent than those of their home countries. This finding challenges the controversial but commonly held view that more stringent environmental regulations deter MNCs’ FME investments. Notably, the magnitude of the regulatory certainty relationship with MNCs’ FME investments is larger than that of regulatory stringency. Findings also indicate that the increased tendency of MNCs to enter countries with more stringent environmental regulations is higher in more democratic countries and for cleaner industry firms.

This paper finds that a greater reliance on foreign market sales increases the volatility of firms’ stock returns, using high-frequency data for publicly listed Japanese manufacturing firms over the period 2000–10. The two margins of global engagement we consider, namely, exports and sales via foreign affiliates (horizontal foreign direct investment), have both a positive and economically significant effect on firm-level volatility. We find, however, that increasing the intensity of sales through foreign affiliates has a stronger effect on volatility than a similar change in export intensity. We also uncover evidence consistent with the notion that firms’ need to use external finance to cover the substantial costs involved in reaching foreign consumers can be an important channel through which firms’ participation in international markets increases their exposure to economic uncertainty.

Previous results show relatively small amounts of time variation in the Hasbrouck (1995) information share across international markets. Using data from a security that was cross-listed on the New York and London Stock Exchanges in the 1860s, we find that the information share changes dramatically during a financial crisis that began in the foreign market.

This paper develops a model of trade that features heterogeneous firms, technology choice and different types of skilled labor in a general equilibrium framework to explain within-industry increase in the relative demand for skilled workers. Its main contribution is to investigate the impact of firms' export and technology choice decisions on skill upgrading. Only firms in the upper range of the productivity distribution produce for the foreign market using high-technology. Since this technology is skilled-biased, exporters that resort to modern technologies are more skill intensive. Empirical evidence is also provided to support the model's main predictions using plant-level panel data from Chile's manufacturing sector (1990–1999).

This paper analyzes the link between firm exports and the competitive environment in foreign markets. We derive a theory-based econometric specification linking destination-specific exports to foreign demand and the degree of 'crowdedness' of foreign markets. The latter is a measure of the number and efficiency of firms competing in a given market and the barriers impeding their access. We estimate this specification on a large sample of Italian manufacturing firms between 1992 and 2003 and use the results for counterfactual experiments. We find that increases in the crowdedness of foreign markets have reduced Italian exports by around 0.2%-0.3% per year. However, other factors such as higher unit labor costs and weak demand growth in Italy's main export market (the EU15) have been much more important in explaining Italian export performance. Our results also indicate that China's impact on Italian exports is small and if anything positive.

Privatization of state-owned enterprises may have important welfare implications, in particular in less developed economies where markets are small and domestic firms are typically relatively weak, both technologically and financially. In these environments, a high-tech foreign investor acquiring the state-owned assets may end up dominating the local market, thereby harming local consumer and producer interests. A foreign investor, however, is likely to be both willing and able to offer a higher bid for the assets than local investors. This paper addresses the trade-off for local governments between privatization revenues and foreign market power. The authors find that there may be an incentive to privatize \"strategically\" by selling the state-owned firm to a local (less advanced) investor at a lower price in order to achieve a more competitive post-privatization market structure.

Recent theoretical and empirical contributions stress the importance of financial development for international trade. This paper investigates whether financial constraints matter for foreign market entry at the firm level using dynamic panel data techniques. Dynamic Probit and Tobit models that account for state dependence and unobserved heterogeneity are used to analyse the effect of financial indicators on export activities. The empirical framework tests for heterogeneous effects among different quartiles of the size and productivity distribution, across previous exporters and potential starters, and across different types of industries as those are predicted by theoretical models. The empirical analysis is applied to a large panel dataset of French manufacturing firms over the years 1998–2005. The data contain a high share of small firms that are usually the most likely to be financially constrained. Although financial indicators are significantly correlated with export status and export share, there is no evidence that financial constraints have a direct impact on foreign market participation or sales in foreign markets once observed and unobserved firm heterogeneity is controlled for. This result is robust to using alternative estimation techniques and also holds for subgroups of firms that are more likely to face financial constraints and industries that are more dependent on financial factors.

This paper studies the reasons behind the export performance of different Mexican states from 1994 to 2002. Mexican exports are divided into two components: (1) foreign market potential; and (2) supply capacity. Results suggest that states that experience an increase in supply capacity are, in most cases, also those with better export expansion. However, results suggest that in most cases, export growth is due mainly to an increase in US demand rather than to an improvement in the states' competitiveness to supply this demand. When looking to the determinants of supply capacity improvements, results suggest the presence of positive neighbouring effects.

In a Bertrand duopoly model, it is shown that an antidumping regulation can be strategically exploited by the home firm to reduce the degree of competition in the home market. The home firm commits not to export to the foreign market which gives the foreign firm a monopoly in its own market. As a result the foreign firm will increase its price allowing the home firm to increase its price and its profits. If the products are sufficiently close substitutes then the higher profits in the home market are large enough to compensate for the loss of profits on exports.

In this study, we seek to advance the network perspective on new venture internationalization by examining the role of networks in accelerating new venture sales into foreign markets. We propose that knowledge derived from ventures' technology and marketing alliances increases the likelihood that new ventures begin exploiting opportunities in international markets. We also argue that the extent to which the networks open the venture to new knowledge or constrain it to knowledge already shared among the partners will influence the initiation of foreign sales by a venture. Using a longitudinal dataset of 118 ventures in the U.S. biotechnology industry, we confirm that different types of alliances (and, therefore, different types of knowledge—technology and marketing knowledge) differentially impact the likelihood of new venture internationalization. Moreover, network cohesion among venture alliances increases the likelihood that marketing alliances will promote initial foreign market sales, but decreases the likelihood that technology alliances will do so. Our research is a timely response to a call for the study of interactive effects among network structure, complex tasks, and time, and it provides a possible explanation for certain unexpected findings in studies that did not consider the effects of time. Copyright © 2010 John Wiley & Sons, Ltd.

Owing to consumers' neophobic responses, successfully launching an ethnic food onto a foreign market is challenging. Information may increase the liking of an ethnic food by decreasing uncertainty about it. This study investigated whether information influences Malaysian consumers' acceptance of and familiarity with Korean ethnic food. Two traditional Korean noodle products were evaluated by 212 Malaysian consumers with different levels of prior experience with Korean food. Familiarity and overall liking were assessed in blind and informed settings. The results showed that previous experience, not information, significantly increased consumer acceptance and familiarity. Information moderated the effect of previous experience, increasing the liking of and familiarity with the ethnic food among frequent consumers of Korean food, but decreasing them among infrequent users. It seems that previous experience helps consumers to form favorable expectations and to expect product performance close to the actual performance, resulting in an assimilation effect in the presence of information. PRACTICAL APPLICATIONS: Successful market entry of an ethnic food requires a systematic approach based on understanding of consumers in a target country. This study presents results relevant to understanding of Asian consumers' liking and perception of ethnic foods. It was identified that information influenced liking by creating expectation rather than by familiarizing consumers, and also that the effect of information was moderated by personal experiences with cuisine of the country which the ethnic food product is originated from. Results of this study suggest that different strategies for delivering information, such as label and product description, should be developed according to the target consumers' level of experiences. Findings from the present study have implications for researchers and marketers in the ethnic food market with regard to presentation of information congruent to actual sensory performances to increase acceptance of an unfamiliar ethnic food.

This study explores how entrepreneurial firms become successful in foreign market entries over time. The setting is the foreign market entries of entrepreneurial firms with headquarters in Singapore, the U.S., and Finland. There are several findings. Firms with more successful foreign market entries decrease improvisation in opportunity selection but increase improvisation in opportunity execution. In contrast, firms with less successful foreign market entries do the opposite. Intriguingly, data suggest that increased improvisation in opportunity execution may be influenced by decreased improvisation in opportunity selection, whereas decreased improvisation in opportunity execution may be influenced by increased improvisation in opportunity selection. Overall, besides contributing fresh insights about the relationship between improvisation and performance in new venture firms, a central contribution of this study is shedding light on the texture of entrepreneurial cognition and the little known relationship between cognition, action, amended cognitions, and redirected action. Copyright © 2009 Strategic Management Society.

Based on knowledge theories, this study examines the impact of client-following and market-seeking entry strategies on foreign market entry by firms. The article also explores the subsequent development of knowledge in firms. Using data from 116 firms, we test three hypotheses using logistic regression. Our hypotheses are supported in the data. Our analysis shows that significant differences exist between client-following firms and market-seeking firms. Client followers are both supported and trapped by their international network, whereas market seekers, though not supported, are much freer to pursue higher-order learning. Due to differences in their network ties, these two types of firms learn at different speeds and learn different things. We also found that firms with proactive knowledge-seeking strategies learn more. Thus, learning strategies have consequences for exploration and exploitation of international markets, what is learned and how much is learned, and proactive internationalization strategies for firms. © 2009 Wiley Periodicals, Inc.

Most studies on the link between exporting status and firm productivity find no evidence of learning-by-exporting, whereas self-selection of more productive firms into exporting is most often confirmed. Furthermore, empirical tests of the learning-by-exporting hypothesis rarely rely on a specific learning mechanism and instead estimate very general tests of the effects of exporting on improvements of firm efficiency. Lack of explicit controls for specific learning mechanisms in turn biases the empirical estimates against finding the learning effects. Here I undertake a more targeted approach to learning-by-exporting by using data on Slovenian manufacturing enterprises between 1994 and 2002 to explore a specific channel for learning in the export markets. Using a variety of empirical tests, I show that competition in exporting markets serves as an added criterion in firm self-selection as only the most productive and fastest growing firms choose to enter more competitive foreign markets. Once home-market competition is explicitly controlled, a significant productivity adjustment effect of exporting firms in response to intensification of export market competition is revealed. Crucially, this provides tentative evidence of learning-by-exporting, which has so far been elusive in the relevant literature.

This study examines the choice, pattern, and timing of sequential modes of entry among multinational corporations investing in China. Specifically, we examine how earlier choices of entry modes influence decisions ahout subsequent modes of entry in a targeted host country. Six hypotheses are developed and tested using a longitudinal sample of 228 Fortune Global 500 firms that have had multiple entries in China between 1979 and 1996. The results provide supportive evidence of our hypotheses. Specifically, firms employed entry modes reflecting low commitment in early stages that were gradually escalated to higher commitment in subsequent decisions. This is consistent with the “incremental in vestment” approach that underlies traditional and contemporary theories and research in market entry decisions. An analysis of entry mode choices over time reveals different learning patterns: the logic of incremental investments (i.e., the escalation of low to high resource commitments); the logic of the “catch-up” follower (i.e., relatively heavy commitment at later stages); and the logic of stable, consistent investments (i.e., the continuation of the same entry mode throughout the time period. There is moderate but inconclusive support for country of origin as a moderating factor. The implications of this study for theory and practice are discussed, as well as its limitations.

This paper provides useful insights in the debate regarding the relationship between stronger patent rights,host country policies and multinational activity using panel data from US MNEs. It analyzes the impact ofstronger patent protection on the exports, local affiliate sales and licensing activities by explicitly modelingthe joint nature of the MNE’s decision-making process in servicing a foreign market. The key findingssupport the idea that the policy environment in the host country influences the impact of stronger IPRs onUS MNE activities during the period 1992 to 2000. A risky environment in the host country appears, onaverage,to have a negative and significant impact on unaffiliated exports and affiliate sales.Increased patentprotection in high-risk countries, on average, appears to reduce licensing, and increase unaffiliated exports,suggesting a dominant monopoly effect of stronger IPRs in the former case and a dominant market expan-sion effect in the latter case. 1. Introduction

Recently, the EU concluded trade agreements with emerging markets in different regions of the world. What explains the EU's pursuit of these agreements? I present an argument that suggests that exporters in the EU mobilize in response to discrimination abroad and push the EU to conclude trade agreements to protect their foreign market access. In two case studies, I show that this protection-for-exporters argument offers a plausible account for the EU's agreements with Mexico and Chile.

A home firm signals her private cost information by expanding in a foreign firm’s country. Credible signaling to deter counter-entry may occur through a direct investment (but not through exports), and may even entail entering an unprofitable market. While this produces social benefits, uninformative signaling may be welfare-reducing. Hence, we argue that moderate to high location costs may be socially desirable. We also show that there are not simple monotonic relationships between technology/demand conditions and firms’ entry modes. Thus, the signaling interpretation of international expansion makes it possible to explain some controversial empirical findings on a theoretical ground.

A recent literature documents the downward impact of national borders on trade. This paper probes the relative importance of two potential sources of border effects: (1) pure locational factors, such as transport costs and tariffs; and (2) an inherent disadvantage for a firm selling in a foreign market. I am able to make this decomposition by using data on the local sales of foreign affiliates of US multinational enterprises, on US bilateral exports, and on domestic sales by host-country firms. The “border effect” arises almost entirely from locational factors. If a firm establishes and sells from a subsidiary located in the foreign country, its local sales are about on a par with those of domestic firms in that market.

Drawing on the strategic management and international business literatures, this study examines the relationships between the experiences of newly selected CEOs and their choice of foreign direct investment (FDI) entry modes. Based on a sample of 380 foreign market entry events involving acquisitions, greenfield investments, and joint ventures, our findings indicate that CEOs with less firm experience preferred acquisitions and greenfield investments to joint ventures and, older CEOs were more likely to opt for joint ventures over greenfield investments. In addition, CEOs with throughput functional experience favoured acquisitions over joint ventures and greenfield investments. Finally, CEO international experience was associated with a greater propensity to choose greenfield investments and acquisitions over joint ventures and also greenfield investments over acquisitions. The implications of the findings from the perspective of theory and managerial practice are discussed, along with possible directions for future research.

Given that pricing plays an important role in a company's international competitive strategy, researchers have long argued the need for theory building in the area of international pricing. This study develops an optimal pricing strategy for foreign market entry using a game theoretic framework. The proposed model assumes two firms, a local incumbent and a foreign entrant, competing in a market. Consumers know the quality of the incumbent's offering, but do not know how it compares to that of the foreign entrant's. Based on these assumptions, and using the theory of inference making, we propose an upward price distortion by the entrant firm as an optimal entry strategy under incomplete information. The paper presents a game theoretic derivation to establish that the game has a unique intuitive separating equilibrium where the entrant firm stands to gain by engaging in upward price distortion to signal high quality to consumers. Copyright © 2006 John Wiley & Sons, Ltd.

� This paper investigates the benefit of experiential knowledge acquired from overseas trade mission participation. Trade missions offer potential assistance to firms by providing less experienced exporters with relevant objective and experiential knowledge about targeted markets. � Findings from a UK study indicate that seasoned exporters benefit more from the scheme, where the activities offered before and during the visits are perceived as targeted more to their needs than less experienced firms. Implications for trade mission organizers and public policies are provided in terms of the way in which support may be changed to more directly benefit firms. Copyright © 2004 John Wiley & Sons, Ltd.

Notwithstanding the dominant role of the United States in world trade, little is known about the relationships between smaller indigenous manufacturers and their foreign customers and how these differ from domestic market relationships. Using data from a recent study among 201 U.S. small and medium-sized enterprises (SMEs), the article reveals that (a) these firms tend to put much more emphasis on the domestic side of their business, while the foreign market receives secondary treatment; (b) the atmosphere governing their relational exchanges differs in the two types of markets, being relatively healthier in domestic business; and (c) their domestic business performance levels, although moderate, are significantly higher than those found in foreign markets. © 2004 Wiley Periodicals, Inc.

As an alternative to exporting, a firm can enter a foreign market by forging a strategic alliance with its foreign counterpart. The alliance eliminates transportation costs and duplications in product distribution networks. At the same time, strategic alliance lessens competition between the firms so that it leads to smaller outputs and higher prices. The degree of lessening of competition depends on the firms’ ability to commit to output levels. In the case where the firms can credibly commit to output levels, the alliance effectively becomes a cartel, restoring prices to the monopoly level. On the other hand, if such commitment is not credible or not possible, prices will be lower than the monopoly level but will still be higher than that if firms had exported to each other's market directly. The welfare effects of the strategic alliance are in general ambiguous.

Using data for a sample of Malaysian stocks that are traded in both Malaysia and Singapore, we show that the turnover rate (trading volume relative to shares held) is significantly higher in the foreign market than in the domestic market. We also find that ownership of cross–listed shares by foreign investors is not motivated by diversification benefits. Instead, we find that the proportion of a firm's shares held in Singapore is directly related to the firm's level of systematic risk.