Strategic investments by US firms in transition economies

Donna L Paul and Rossitza Wooster ()
Additional contact information
Donna L Paul: Department of Finance, Insurance & Real Estate, Washington State University, Pullman, WA, USA

Journal of International Business Studies, 2008, vol. 39, issue 2, 249-266

Abstract: Studies in international business have considered both theoretical and empirical analyses of investment strategies by multinational firms in transition economies. However, there is scant research on the impact of firm-specific factors on the likelihood, timing, and mode-of-entry decisions in these economies. We provide evidence on three aspects of the strategic decisions by US firms to invest in transition economies. First, we find that firms entering the region have greater advertising intensity and sales growth than industry peers that did not enter the region, suggesting that market-seeking considerations motivate expansion. Second, we find that earlier entry is undertaken by firms with fewer industry competitors and higher sales growth, suggesting that the desire to secure market share ahead of competitors motivates entry timing. Finally, we investigate the choice of entry mode into the region, and find that firms from concentrated industries are more likely to enter the region with high-equity commitment, consistent with market-seeking motives. We also find that firms incorporate the degree of progress with market-oriented reforms in making decisions concerning entry timing and mode. Journal of International Business Studies (2008) 39, 249–266. doi:10.1057/palgrave.jibs.8400334

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://www.palgrave-journals.com/jibs/journal/v39/n2/pdf/8400334a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jibs/journal/v39/n2/full/8400334a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

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:pal:jintbs:v:39:y:2008:i:2:p:249-266

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().