Oligopolistic reaction and multinational enterprise

“The effects of specific strategic behaviour towards rivals for MNCs’ activities are analysed in Knickerbocker (1973), Cowling & Sugden (1987 ) Graham (1978, 1992).”

“Kinoshita and Mody(1997) con rm the existence of such herd behavior of Japanese investors in Asia.2 For U.S. rms, Knickerbocker (1973) shows that this \follow-the-leader" syndrome is prevalent particularly for foreign investment decisions in oligopolistic industries.”

“On the other hand, in his theory called "Oligopolistic Reaction" Knickerbocker (1973), suggested that investors take the decision of FDI to follow the behavior of their competitors who invested in another country to move”

“On the other hand, the greenfield strategy is far more appealing when there is rapid expansion in a market (Knickerbocker, 1973).”

“Knickerbocker's (1973) follow-the-leader-theory proposes that, in oligopolistic markets, other multinational enterprises (MNE) follow if one MNE engages in FDI.”

“This phenomenon has been referred to as “oligopolistic reaction” ( Knickerbocker, 1973”

“It provides a theoretical explanation for the competitive interaction of these firms with their rivals (Knickerbocker 1973).”

“Similarly, competition may come from other CTNCs, leading to the phenomenon of follow-the-leader behaviour and oligopolistic reaction from their competitors (Chapman, 1991; see also Knickerbocker, 1973).”

“Knickerbocker’s Oligopolistic Reaction Theory argues that FDI tends to flow to countries with developed capital markets [31].”

“The link to IO goes back to the international oligopoly models of Rowthorn and Hymer (1971), Vernon (1971), Knickerbocker (1973) and Graham (1978), whilst the link to innovation goes back to Cantwell (1989).”

“Some evidence of this so-called Knickerbocker (1973) effect for Japanese corporations is provided by Yu and Ito (1988), in the case of Japanese investments in the US tyre and textile industries, Dunning (1994) for the entry of Japanese machinery firms in Europe and Tomlinson (2005) for the global…”

“and establishing FDI positions in the same markets (Knickerbocker, 1973; Flowers, 1976; Ito & Rose, 2002; Rose & Ito, 2008).”

“While there are a variety of paradigms, schools of thought, and approaches available about competitiveness and competitive dynamics, it has long been recognized that firms might engage in FDI to match a rival's move under certain circumstances (Knickerbocker, 1973).”

“The second perspective is based on oligopolistic industries (Knickerbocker 1973).”

“Knickerbocker (1973) argues that, due to oligopolistic competition, we may witness an increase in FDI flows to the relatively ‘younger’ economies.”

“There are several approaches for analysing the causes that make firms start a process of internationalization, but all of them suggest that companies are looking to obtain some benefits from this process (Vernon 1966; Knickerbocker 1973; Goerzen and Beamish 2003).”

“Knickerbocker (1973) first put forward this theory within oligopolistic industries framework.”

“Much like treatises on growth in developed economies, larger size is equated to market power (Knickerbocker, 1973).”

“A first set of contributions, initiated by Krugman (1991) and referred to as the economic geography, tries to explicitly define the forces leading to the agglomeration of firms.”

“The oligopolistic industries theory of Knickerbocker (1973) posits that firms follow others in entering foreign markets.”

“The focal company ’ s performance may be affected negatively if it does not follow its rivals (Knickerbocker, 1973).”

“Similarly, Knickerbocker (1973) argues that risk minimization leads to “follow the leader” behavior.”

“Nachum et al. (2008) argue that a country’s location will still influence the corporate managers’ destination choices. With this in mind, we keep physical distance from home as a determinant of FDI in our analysis and use a gravity model in our empirical work, first introduced for international trade by Tinbergen (196…”

“Major contributions to the understanding the economics of IB were also initiated during this period including Stephen Hymer’s [28] seminal contribution on the determinants of FDI and Raymond Vernon’s [29] product-life cycle approach, paving the way for later theoretical developments from Knickerbocker [30], Aliber [31…”

“Both of these models leaned on structural imperfections in markets to explain FDI and led to what has been called the strategic behavior approach to international business (Graham, 1974; Knickerbocker, 1973).”

“During Macharzina editorship (1980-1990), the most cited were Aharoni (1966), Buckley and Casson (1976), Knickerbocker (1973), Stopford and Wells (1972) and Haire et al. (1966).”

“…1998; Minifie andWest, 1998; Buckley and Ghauri, 2004; MacCann and Mudambi, 2004; Peng, 2009), although in the past they have been somewhat underrated and circumscribed to the economic mainstream (Smith, 1776; Ricardo, 1817; Vernon, 1966; Knickerbocker, 1973; Krugman, 1991, 1998; Venables, 1998).”

“Last but not least, economic theorists have modelled strategic moves made in the 1970s to “follow the leader” in order to balance strategic power again (Knickerbocker, 1973) or to “cross invest” in order to disturb the competitive balance on a global scale (Graham, 1978).”

“In line with these arguments, Knickerbocker ( 1973 ) conceptualized FDI activity with reference to the oligopolistic structure of the market, suggesting that a firm’s decision to invest abroad may stimulate reactive moves by its domestic rivals.”

“Monopolistic Advantages (Hymer, 1976), Oligopolistic Reaction (Knickerbacken, 1973), Internalization ( Buckley and Casson, 1976; Rugman, 1979), to the Eclectic Theory (Dunning, 1973, 1977, 1980, 1988) have discussed characteristics of FDI in general.”

“Much like the treatises of growth in developed economies, the larger size implies market power (Knickerbocker, 1973).”

“Knickerbocker (1973) asserted that expanding investment outside borders is a defensive strategy in oligopolistic markets, as it enables firms to follow their primary competitors in order to avoid distortions in oligopolistic equilibrium (Hoenen and Hansen, 2009).”

“This theory suggests that firms go abroad because of oligopolistic reaction, which is an interactive kind of corporate behaviour by which competitive industries composed of a few large firms counter one another’s moved by making similar moves by themselves to compete in new markets production (Knickerbocker, 1973).”

“Following rivals' actions acts as a mechanism for neutralizing this threat and for keeping a firm's relative competitive market position constant (Knickerbocker, 1973).”

“In his ‘oligopolistic reaction’ thesis, Knickerbocker (1973) elaborated on strategic rivalry as the motivation for two-way FDI—a point that had been noted earlier by both Hymer (1976) and Vernon (1970).”

“The normative International Market Selection (IMS) model (Papadopoulos and Denis, 1988) proposes several factors for assessing the potential attractiveness of a target market including user profiles (Root, 1994), market size and growth (Davidson, 1980b; Stobaugh, 1969), competition (Knickerbocker, 1973), servicing cos…”

“What is new in the present study is that agglomeration is tested as an origin-effect, in contrast to its use as a location determinant elsewhere (Knickerbocker, 1973; Head et al., 1999).”

“; 1967); principalmente investimento direto no exterior (“IDE” ou Foreign Direct Investment “FDI”) (KNICKERBOCKER, 1973; GRAHAM, 1998); exportação, licenciamento e FDI (ALIBER, 1970); produção direta no exterior versus licenciamento (McMANUS, 1972; BUCKLEY, CASSON, 1976; RUGMAN, 1981; HENNART,…”

“Knickerbocker (1973) found a tendency for firms operating within a loose oligopoly to follow the industry leader, setting up foreign subsidiaries in locations pioneered by the leader firm.”

“A strong provider-customer interaction means that client’s multinationalisation leads producers to follow them and start operating abroad [Knickerbocker, 1973; Yannopoulos, 1983].”

“…theory (Hymer, 1960), product life-cycle theory (Vernon, 1966), internalization theory (Buckley & Casson, 1976), oligopolistic reactions (Knickerbocker, 1973), factor endowment theory (Kojima, 1973), transaction costs theory (Williamson, 1975), and so on rarely discussed the issues of…”

“…other while initiating a new product or a process, adopting managerial or organization approach, and in the type and timing of financing and investment decision, since mimicry provides the benefits of competitive advantage (Klemperer, 1992) and reduced corporate uncertainty (Knickerbocker, 1973).”

“…implement FDI for a variety of strategic motives, including the following: to reduce competition (Bain, 1956), to diversify risk (Qian and Li, 1998), to obtain monopolistic advantages (Kindleberger, 1969), to follow the leader (Knickerbocker, 1973) and to interact oligopolistically (Graham, 1974).”

“According to Knickerbocker (1993), mergers can result from an ‘oligopolistic reaction whereby if two firms in an oligopolistic”

“…Vernon (1985) acknowledged that although the theory had some explanatory power of the US MNEs, it had declined. d. MNEs as Oligopolistic Reactions of Firms This view suggests that oligopolistic firms will respond to initial FDI of rival firms in order to seize a market share (Knickerbocker, 1973).”

“For example, Knickerbocker (1973), Graham (1978), and others explain FDI patterns of the 1960s and 1970s as an oligopolistic or rivalrous reaction to earlier FDIs of domestic or foreign competitors.”

“, Johanson and Vahlne 1977; Johanson and Wiedersheim-Paul 1975), and other researchers suggest a more revolutionary internationalization pattem with bursts of internationalization moves (e.g., Macharzina and Engelhard 1991; Knickerbocker 1973).”

“This bunching occurs first among competing companies, in a form of oligopolistic reaction (Knickerbocker 1973 ), in which competing companies tend to enter a country within proximate times of one another.”

“Additionally, once a market incumbent has achieved competitive advantage over his domestic rivals through the relocation of production to LCCs, other advanced market firms will feel pressure to follow suit, an behavior referred to as oligopolistic parallel behavior (Knickerbocker, 1973).”

“Following Rodrı́guez-Pose and Crescenzi (2008), like other forms of economic activity, FDI’s location is sensitive to place-specific characteristics such as agglomeration and proximity.”