Foreign Market Entry: Production-Related Strategies

Ming-Je Tang and Chwo-Ming Joseph Yu
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Ming-Je Tang: Department of Business Administration, University of Illinois at Urbana--Champaign, Champaign, Illinois 61820
Chwo-Ming Joseph Yu: Department of Business Administration, University of Illinois at Urbana--Champaign, Champaign, Illinois 61820

Management Science, 1990, vol. 36, issue 4, 476-489

Abstract: This paper examines the profit to a firm of different production-related strategies for entering a foreign market. The entry strategies examined are foreign direct investment, exclusive licensing, multiple licensing, joint venture, and a combination of joint venture and licensing. It is shown that even though the entering firm is able to charge the optimal licensing fee, foreign direct investment generates the highest profit and is thus the dominant entry strategy in many contexts. This paper also suggests counter-strategies for responding to government restrictions on firms' entry.

Keywords: entry strategy; multinational enterprises; host government (search for similar items in EconPapers)
Date: 1990
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:36:y:1990:i:4:p:476-489

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