A model of competition between multinationals

Download

731-4562-1-PB.pdf

Date

2015-8

Author

Koska, Onur A

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

218
views

89
downloads

This study models competition between multinationals sequentially entering the same market, and analyzes how they choose their entry modes between trade, greenfield investment and acquisition, and how competition amongst them affects their choices. I discuss two important factors that lead a multinational whether or not to acquire a local firm: the intensity of pre- and post-acquisition competition. The former determines both the acquisition price and the profitability of the next best alternative entry mode, whereas the latter determines the extent of business stealing by the rival. The results point to a non-linear relationship between trade and investment liberalization and foreign direct investment.

Subject Keywords

Market Entry, Foreign Direct Investment, Acquisition, Trade

URI

http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/731
https://hdl.handle.net/11511/58236

Journal

ODTÜ Gelişme Dergisi

Collections

Department of Economics, Article

Suggestions

OpenMETU
Core

Gains from multinational competition for cross-border firm acquisition Koska, Onur A. (ZBW - German National Library of Economics, 2019) This study shows that when there is multinational competition for foreign acquisition, the strategic use of a consumer welfare argument in regulating foreign market entry leads to a preemptive foreign acquisition. Even under fierce competition, foreign acquisition will emerge as part of a non-cooperative equilibrium (although multinationals would have gained more had they been able to credibly commit to a cooperative equilibrium of independent foreign sales, either via greenfield investment or trade un...
An Analysis of momentum and mean reversion effects on equity indices Özbilge, Armağan; Yolcu Okur, Yeliz; Nazlıben, Kamil Korhan; Department of Financial Mathematics (2015) Momentum and mean-reversion effects have become very popular in finance literature for the last two decades since their presence can generate abnormal profit patterns by applying either relative strength or contrarian trading strategy accordingly. Even though there are some common factor explanations for return reversals, they might not provide the full picture for return persistence. In our theoretical framework, we analyse some of the well-known discrete time momentum studies including the initial one and...
Do US Corporate Governance Standards Effectively Discourage Risk in the Emerging Markets? Sayari, Naz; Marcum, Bill (2018-06-01) This study provides an examination of the effect of various corporate governance factors on the management of the risks inherent in business and the potential divergent impact of these factors on US firms and firms in emerging countries. In particular, the study scrutinises corporate governance and corporate risk-taking behaviour across different political and socioeconomic environments. In a cross-sectional time-series setting, two-step generalised least squares regression outcomes reveal that the impact o...
An Empirical model of the international cost of equity Uzunkaya, Mehmet; Küçükkaya, Halit Engin; Department of Business Administration (2015) The aim of the study is to propose an empirical model of the international cost of equity by investigating and analyzing the long-run relation between disaggregated country risk ratings and country stock market index returns for a large panel of countries. The study tests the hypothesis that, given the available theoretical and empirical evidence, country risk ratings and country stock market index returns should move together in the long-run and there should be a long-run equilibrium between them; thus cou...
An analysis of stock splitz in the İstanbul Stock Exchange Yılmaz, Işıl Sevilay; Rhoades, Seza Danışoğlu; Department of Business Administration (2003) The primary purpose of this study is to test the validity of the trading range hypothesis as a basis for stock split decisions of Turkish companies. In the first part, the liquidity effects of stock splits on Turkish stocks are examined. Second, the optimal trading ranges for different-sized firms and firms with different investor bases are determined. Finally, the main empirical question of the study is analyzed by testing whether or not Turkish firms whose share prices rise above their optimal trading ran...

Citation Formats

O. A. Koska, “A model of competition between multinationals,” ODTÜ Gelişme Dergisi, vol. 42, no. 2, pp. 271–298, 2015, Accessed: 00, 2020. [Online]. Available: http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/731.