Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements

Keith Head, Thierry Mayer and John Ries ()

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Knickerbocker (1973) introduced the notion of oligopolistic reaction to explain why firms follow rivals into foreign markets. We develop a model that incorporates central features of Knickerbocker's story—oligopoly, uncertainty, and risk aversion—to establish the conditions required to generate follow-the-leader behavior. We find that rival foreign investment will make risk-neutral firms less inclined to move abroad once its rivals have done so. We show that Knickerbocker's prediction relies on risk aversion and derive an expression for the minimum amount of risk aversion needed to generate oligopolistic reaction.

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Published in Journal of Economics and Management Strategy, 2002, 11 (3), pp.453-472. ⟨10.1111/j.1430-9134.2002.00453.x⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements? (2002)
Working Paper: Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements (2002)
Working Paper: Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements (2001)
Working Paper: Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements? (2000)
Working Paper: Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements? (2000)
Working Paper: Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements? (2000)
Working Paper: Revisiting Oligopolistic Reaction: Are FDI Decisions Strategic Complements? (2000)
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:hal:cesptp:hal-00267447

DOI: 10.1111/j.1430-9134.2002.00453.x

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().