Export , FDI and Cross-Border Strategic Alliances

Content Provider	Semantic Scholar
Author	Qiu, Larry D.
Copyright Year	2006
Abstract	This paper develops a model that incorporates firms' decisions on cross-border strategic alliances and international market entry modes (i.e., export or FDI). Market size, product differentiation, distribution costs and alliance synergies are important factors that affect the firms' incentives to form strategic alliances and their choice between exports and FDI. In particular, we find that a larger market size, lower distribution costs and greater alliance synergies raise the relative attractiveness of FDI over export. Cross-border strategic alliances promote FDI. The alliance incentives are higher when the alliance formation induces the firms to switch from export to FDI. In equilibrium, alliances are formed if the products are sufficiently differentiated, but there is no alliance if the products are close to homogenous goods. JEL Classification No.: F12, F23
File Format	PDF HTM / HTML
Alternate Webpage(s)	http://www1.econ.hit-u.ac.jp/trade/apts/2006/pdf/Larry_Qiu.pdf
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article