Citation

Discussion Paper Details

Please find the details for DP7567 in an easy to copy and paste format below:

Full Details | Bibliographic Reference

Full Details

Title: Endogenous Market Structure and Foreign Market Entry

Author(s): James R. Markusen and Frank St�hler

Publication Date: November 2009

Keyword(s): Cross-border acquisitions, endogenous market structures, foreign direct investment and multinational firms

Programme Area(s): International Trade and Regional Economics

Abstract: Models dealing with cross-border acquisitions versus greenfield investment usually assume that the entry of a foreign firm into a market has effects on the outputs of all domestic firms in that market, but exit or entry of local firms is not considered. The purpose of this paper is to re-examine the acquisition versus greenfield versus exporting question under fixed versus free entry assumptions for local firms. Our finding is that greenfield entry and exporting options are more attractive relative to acquisition when the local market structure adjusts to foreign entry through local entry or exit than when it is fixed. The entering foreign firm may do better or worse under free entry versus a fixed market structure depending on its optimal choice under the latter assumption.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7567

Bibliographic Reference

Markusen, J and St�hler, F. 2009. 'Endogenous Market Structure and Foreign Market Entry'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7567