Playing away to win at home

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Title: Playing away to win at home
Authors: Pavelin, Stephen
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Date: Dec-2006
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 not 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.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Keywords: Foreign direct investmentMultinational firmR&DOligopoly
Subject LCSH: Investments, Foreign
International business enterprises
Research and development projects
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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