Competitive Interactions between Global Competitors: The Entry Behavior of Korean and Japanese Multinational Firms

Sea-Jin Chang and Andrew Delios
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Sea-Jin Chang: Korea University, National University of Singapore

Microeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: We investigate the competitive influence on a multinational firms geographic market entry decisions as conditioned on the actions of industry competitors from within its own country and on the actions of competitors from a nearby country. We frame our study in the competitive action literature in which we interpret the market entry decision in the context of the timing of the globalization of a firm. Using descriptive and multivariate analysis, we try to understand how late entrants are influenced by the actions of early entrants and how early entrants react to the competitive challenges posed by late entrants. We examine the entry behavior of Japanese and Korean firms across four distinct strategic time periods, and find that Korean firms tended not to follow the actions of Japanese competitors. Meanwhile, Korean and Japanese firms actively imitated the investment decisions of peer firms, competing in the same industry.

Date: 2006-08
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