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Foreign-Market Entry Strategies in the European Union

Author

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  • Stiegert, Kyle W.
  • Ardalan, Archie Amir
  • Marsh, Thomas L.

Abstract

This study utilized intra-firm, socio-cultural, geographical-proximity, and political-stability variables to explain bimodal foreign direct investment (FDI) patterns by agri-food and beverage multinational companies into and within the European Union. A logit framework incorporated a unique-count database of firm-level investment patterns from 1987–1998. The results showed the 1992 structural changes under the Maastricht Treaty increased the probability of wholly owned FDI modes such as greenfields and buyouts. The model also found that past modal strategies of firms, language barriers, and exchange-rate volatility all correctly explained modal investment patterns. The results provide important contributions toward understanding modal investment strategies including the role of macroeconomic changes within a custom union.

Suggested Citation

  • Stiegert, Kyle W. & Ardalan, Archie Amir & Marsh, Thomas L., 2006. "Foreign-Market Entry Strategies in the European Union," Journal of Food Distribution Research, Food Distribution Research Society, vol. 37(3), pages 1-12, November.
    • Handle: RePEc:ags:jlofdr:7067
    DOI: 10.22004/ag.econ.7067
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    References listed on IDEAS

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    1. D Sethi & S E Guisinger & S E Phelan & D M Berg, 2003. "Trends in foreign direct investment flows: a theoretical and empirical analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(4), pages 315-326, July.
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    3. Head, K. & Mayer, T. & Ries, J., 2000. "Revisiting Oligopolistic Reaction : Are FDI Decisions Strategic Complements?," Papiers d'Economie Mathématique et Applications 2000.49, Université Panthéon-Sorbonne (Paris 1).
    4. Keith Head & Thierry Mayer & John Ries, 2002. "Revisiting Oligopolistic Reaction: Are Decisions on Foreign Direct Investment Strategic Complements?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 453-472, September.
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    Cited by:

    1. Catherine Laffineur & El Mouhoud, 2015. "The jobs at risk from globalization: the French case," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 477-531, August.
    2. Cai, Xiaowei & Stiegert, Kyle W., 2012. "Modal FDI Strategies in Asia-Pacific Region," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(2), pages 1-14, May.

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