Export, Foreign Direct Investment, and Joint Ventures : Learning the Rival's Costs through Propinquity

Volume: 691
Published: Jun 1, 2007
Abstract
We examine the role of cost uncertainty in a firm's choice between exporting and foreign investment in oligopolistic industry. We consider both foreign direct investment and an international joint venture, and allow country-specific and firm-specific cost uncertainty. Unlike exporting, either form of foreign investment exposes home and foreign firms to common country-specific cost shocks, implying a better knowledge of each other's...
Paper Details
Title
Export, Foreign Direct Investment, and Joint Ventures : Learning the Rival's Costs through Propinquity
Published Date
Jun 1, 2007
Volume
691
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