International Investment and International Trade in the Product Cycle*

Vernon, Raymond

doi:10.4324/9781315199689-6

Cited by 668 publications

(966 citation statements)

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“…Second, ODI may substitute the home country 's exports by moving domestic factories and their sales overseas. Vernon (1966) proposes the application of the product life cycle theory for the study of ODI. This theory suggests that when production technology matures and products become standardized, companies who first invent and produce new products in the developed countries will experience four stages of investment: invest domestically, export to other countries, invest in more developed countries, and gradually move to developing countries to take advantage of their low-cost factors.…”

Section: Substitution Effect From Outward Direct Investment To Exportsmentioning

confidence: 99%

Remedy or Poison: Impacts of China's Outward Direct Investment on Its Exports

Liu

Gou

Feng

2015

China and World Economy

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During the past decade, China's outward direct investment (ODI) and exports have experienced rapid growth, drawing increasing attention to the relationship between them. Using the gravity model based on panel data on China 's ODI and trade to 174 countries and regions during 2003 -2012, the present paper investigates the impacts of China 's ODI on exports. We find that China's ODI to a host country significantly promotes China 's trade with that economy: a 10-percent increase in ODI stock can lead to a 2.14-percent increase in exports, a 2.07-percent increase in imports and a 2.87-percent increase in net exports. The scale of the host country's economy, its infrastructure and its distance to China also have significant impacts on China's exports. Therefore, growth in ODI will facilitate China 's trade and integration into the global economy, and enhance industrial upgrading in China by transferring the low-end industries abroad.

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Section: Substitution Effect From Outward Direct Investment To Exportsmentioning

confidence: 99%

Remedy or Poison: Impacts of China's Outward Direct Investment on Its Exports

Liu

Gou

Feng

2015

China and World Economy

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“…The quest for an ideal foreign market is at the heart of the strategic management process of any firm venturing globally. If earlier literature saw the internationalization of the modern corporation as a function of its product life cycle (e.g., Vernon, 1966), and the path dependent progression of its foreign expansion experiences and skills (e.g., Johanson and Vahlne, 1977), or as a vehicle for foreign domestic investment (e.g., Buckley and Casson, 1976;Dunning, 1992), scholars and practitioners increasingly have come to acknowledge that locating in a foreign land is a decision that also involves the firm's transnational searches for more assorted assets and other types of know-how (Cantwell, 2009;Alcacer and Chung, 2007;Porter, 2000;Aharonson, Baum, and Feldman, 2007;Doner, McKendrick, and Haggard, 2000;Henisz and Delios, 2001;Pe'er, Vertinsky, and King, 2008;Bartlett and Ghoshal, 1992).…”

Section: Introductionmentioning

confidence: 99%

“…Our understanding of the internationalization of the modern corporation draws from well-known theoretical underpinnings, one of which sees the foreign expansion process as a function of the firm's product life cycle. For instance,Vernon (1966) argued that international trade patterns emerged from the evolution in a product's lifetime, in that parts and labor…”

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confidence: 99%

Location and the Global Advantage of Firms

Mesquita

2016

Global Strategy Journal

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The goal of this article is to point to a research agenda framing the internationalization of firms on theories of location—which is defined as positions of place, time, and space that engender tacit sources of competitive advantage. Despite recent research merging location and internationalization theoretical models, much remains unknown, and future work is warranted to respond to four fundamental questions: (1) why firms venture abroad; (2) how such motivations shape FDI patterns; (3) how multinational firms shape the foreign environments they enter; and (4) what resources and (dynamic) capabilities are involved in such a process. The specific contributions of the articles to the research agenda are also highlighted here. Copyright © 2016 Strategic Management Society.

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“…Today's international arena truly offers a plethora of opportunities for NPD endeavors. Gone are the times when domestic markets were the only likely source of highly innovative ideas and concepts (Cantwell, 1989;Vernon, 1966). Valuable knowledge sources have started to mushroom in far-flung geographic locations and in unlikely lead markets (Immelt, Govindarajan, and Trimble, 2009;Tiwari and Herstatt, 2012).…”

Section: Global Footprint and Npd Program Successmentioning

confidence: 99%

Firm Characteristics and NPD Program Success: The Significant Influence of Global Discovery Management

Dubiel¹,

Durmuşoğlu²,

Gloeckner³

2016

J of Product Innov Manag

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Managing new product development (NPD) with a global point of view is argued to be essential in current business more than ever. Accordingly, many firms are trying to revitalize their NPD processes to make them more global. Therefore, examining global NPD management is one of the top priorities for research. While scholars have examined global launch management, there has been scant attention on the direct effect of global discovery management on NPD success. Therefore, this study investigates how a globally managed discovery phase enhances a firm's overall NPD success. Drawing upon the resource‐based view (RBV) and using Kotabe's () generic model for market success in global competition as the overarching framework, this study examines four drivers of NPD success: global discovery management, the firm's “global footprint,” its inbound knowledge sourcing practices (i.e., “open innovation proclivity”), and nationality of the teams (i.e., “cross‐national global NPD team use”). The hypotheses are tested using a sample of 255 business units from multiple industries, headquartered worldwide, and surveyed during the 2012 PDMA Comparative Performance Assessment Study (CPAS). The PLM‐SEM analyses show that, of the four drivers examined, only global discovery management strongly influences a firm's NPD program success. The findings enhance our understanding of the particularities in global NPD. Based on the study's results, suggestions are provided as to how multinationals can leverage their international operations in the course of their front‐end activities.

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International Investment and International Trade in the Product Cycle*

Cited by 668 publications

References 0 publications

Remedy or Poison: Impacts of China's Outward Direct Investment on Its Exports

Remedy or Poison: Impacts of China's Outward Direct Investment on Its Exports

Location and the Global Advantage of Firms

Firm Characteristics and NPD Program Success: The Significant Influence of Global Discovery Management

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