Responses of Advanced Country MNEs to Low-cost Country Imports in Their Home Markets

Lutz Kaufmann () and Peter Körte
Additional contact information
Lutz Kaufmann: WHU—Otto Beisheim School of Management
Peter Körte: WHU—Otto Beisheim School of Management

Management International Review, 2010, vol. 50, issue 2, No 5, 262 pages

Abstract: Abstract There has been little exploration of the competition arising from low-cost countries' imports to the home markets of multinational enterprises (MNEs) headquartered in developed countries. This study presents theoretical and empirical analyses of the level of future MNE activities in LCCs due to the rising prevalence of LCC imports in the MNEs' home markets. Building upon oligopolistic parallel behavior theory, we analyze the impact of LCC competition intensity and LCC product quality. We test the model using data collected from a top management survey of 423 U.S. and German manufacturing firms. The intensity of competition from LCCs and the quality of products imported from LCCs significantly explain MNEs' subsequent responses to that competition. Cross-country comparisons show that while LCC product quality is important in both samples, the intensity of competition from LCCs is significant for MNEs' future activities in LCCs only in the U.S. sample. A stronger prior orientation toward LCCs and low logistics costs also lead to higher levels of future MNE activities in LCCs, while technological progress does not.

Keywords: Low-cost countries; Import competition; Oligopolistic parallel behavior theory (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11575-010-0033-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:manint:v:50:y:2010:i:2:d:10.1007_s11575-010-0033-4

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/11575

DOI: 10.1007/s11575-010-0033-4

Access Statistics for this article

Management International Review is currently edited by Michael-Jörg Oesterle and Joachim Wolf

More articles in Management International Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().