Oligopolistic reaction and multinational enterprise

“MNC responses are part of a sector dynamic as companies closely watch competitors’ behaviour, with a tendency to ‘follow the leader’ (Knickerbocker, 1973; Kolk and Levy, 2004).”

“KEYWORDS: location strategies, multinational strategy, oligopolistic competition, game theory, firm heterogeneity Electronic copy available at: http://ssrn.com/abstract=2101767”

“First, follower firms might react out of concern that early entrants could gain additional information about a potential market and use their first-mover status as an advantage (Knickerbocker 1973).”

“…or from the standpoint of industrial economics (Caves 1971; 1974) had similarly existed prior to the emergence of the eclectic theory in 1976, as have theories on oligopolistic rivalry between MNCs to include Hymer and Rowthorn (1970), Vernon (1971, 1974), Knickerbocker (1973) and Graham (1975).”

“Lieberman and Asaba [2004] and others describe reasons why firms may imitate each other’s strategies explicitly.”

“The argument dates back at least to Knickerbocker (1973) and Graham (1978) and takes into account the roles of rivalry between and collusion among firms as factors in the foreign direct investment decision.”

“Thus, Knickerbocker (1973) argues that firms engage in ‘follow-the-leader’ behaviour to minimize risks.”

“The structure entrepreneurs’ actions are dependent on the other players in the industry and can be characterised as oligopolistic reactions (Knickerbocker, 1973).”

“For example, Knickerbocker (1973) suggested that the rate of interfirm initiatives is higher when more customers and fewer competitors enter a market.”

“To support this argument, Ravi (2015) show that corruption in India has a detrimental effect on FDI, whereas in China has the opposite effect because corruption in China is low while in India is very high.”

“Ownership advantages may trigger various forms of strategic behaviour between foreign banks, which commonly include the follow-theleader, ‘tit-for-tat’ oligopolistic reaction (KNICKERBOCKER, 1973) and exchange of threats (GRAHAM, 1978).”

“Finally, if there is an oligopolistic competition then the oligopolistic reaction theory of Knickerbocker (1973) would predict even higher flows to the “younger” economies.”

“10 The concept is developed in Knickerbocker (1973).”

“The fi rms' decisions to locate their investments in a particular country may be in fl uenced by theexperienceofothercompaniesinvestingthere(Jianget al.,2014;Knickerbocker,1973).”

“For the new investors in the market, entry through acquisition helps them to speed up their response to the competitive threat posed by the entry of ‘leaders’ or the competitors already in the market (Knickerbocker, 1973 ; Dubin, 1975 ; Wilson, 1980 ; Yu & Ito, 1988 ).”

“Knickerbocker (1973) , for example, speaks about the timing of foreign investment, but it is in the context of a company’s foreign investment activities relative to its competitors.”

“…low industry concentration, reduces the bargaining power of an MNC, as firms have to battle more fiercely against each other for, inter alia , customer support, best inputs, or the latest technology (Knickerbocker, 1973; Fagre & Wells Jr., 1982; Kim, 1988; Lecraw, 1984; McKern, 1976; Tarzi, 1991).”

“Knickerbocker (1973) presents the hypothesis that, once a bank has started the process of internationalization, its home markets rivals might follow on the basis of oligopolistic reaction.”

“Knickerbocker (1973) was one of the earliest to explore the impact of domestic rivalry on foreign expansion, and several subsequent studies have argued and shown that home-based competition pushes firms to match the foreign investment moves of industry rivals (Martin et al., 1998; Porter, 1990;…”

“2 7 This statement re ‡ects the so - called follow - my - leader strategy , an idea originating in Knickerbocker ( 1973 ) .”

“The threat of competition arises from local enterprises, as well as from the affiliates of fellow MNEs, which often follow their rivals overseas to protect their markets (Knickerbocker 1973).”

“Knickerbocker (1973) first put forward this theory, which is based on Oligopolistic industries.”

“In a pioneering study of FDI by 23 US multinationals over the period 1948–67, Knickerbocker (1973) found that bunching of investment and imitative behaviour increased with seller concentration up to a point and that bunching was most likely to occur in moderately concentrated industries which, in…”

“Empirically, frequency-based imitation has been found to occur in the context of a variety of strategic actions, including foreign investment (Fernhaber & Li, 2010; Knickerbocker, 1973) and foreign divestment (Soule et al., 2014; Xia et al., 2008).”

“For example, the concentration of the industry in a firm’s home country has been used as an indicator of oligopolistic pressure to emulate rivals’ moves (Knickerbocker, 1973).”

“, competitive strategies in the electronics, computer and telecommunications industries): Knickerbocker produced an interesting doctorate thesis on this subject in the 1970s [22].”

“…these companies have had to adopt policies that maximise their presence in not just those locations which are their primary markets, but also all those locations where their competitors are operating, in a variant of what was described by Knickerbocker (1973) as a follow-my-leader strategy.”

“Firms closely watch the behaviour of competitors, with a tendency to ‘follow the leader’ (cf. Knickerbocker, 1973) or to jump on the bandwagon (cf. Abrahamson & Rosenkopf, 1993), regardless or even despite of the fact that this may imply inefficiencies or losses.”

“In addition, there is the follow-my-leader strategy, as originally highlighted by Knickerbocker (1973).”

“Thus, some theories explain the inflow of foreign direct investment (Vernon, 1966; Knickerbocker, 1973; Hymer, 1976; Dunning, 1988, 2001; Djokoto, 2021b).”

“The IO perspective has formed the basis for much of the early thinking on FDI, which essentially explained FDI as an extension of oligopolistic competition to foreign locations (Hymer, 1960/1975; Kindleberger, 1972; Knickerbocker, 1973; Graham, 1974).”

“In an oligopolistic reaction to foreign competitor’s entry in the domestic market (Knickerbocker, 1973), in 1993 B&A engaged in an international strategy with the acquisition of a company oriented to foreign markets.”

“In oligopolistic industries, firms invest in other countries as a strategy by following their domestic competitors (Knickerbocker, 1973).”

“He starts from the product life cycle theory with the aim to develop an explanation for locational “bunching up” of foreign direct investment (Knickerbocker, 1973).”

“'if they do it, it must be a good thing' In addition, there is the follow-my-leader strategy, as originally highlighted by Knickerbocker (1973).”

“Although we cannot rule out strategic behaviour, such as oligoplistic interaction (Knickerbocker, 1973), or strategic asset-acquiring investment (Dunning, 1993), which are characteristic of industrialised country firms, the current data set is not appropriate for investigating those issues, which…”

“This is exemplified in the fact that many companies do not or only very hesitantly invest abroad although the expected earnings far outweigh the expected risks (Aharoni 1966; Johanson/Vahlne 1977); the fact that companies in oligopolistic markets do not pursue the most promising investment possibilities abroad, but pr…”