Responses of Advanced Country MNEs to Low-cost Country Imports in Their Home Markets

Abstract

0There has been little exploration of the competition arising from low-cost countries′ imports to the home markets of multinational enterprises (MNes) headquartered in developed countries. 0 this study presents theoretical and empirical analyses of the level of future MNe activities in LCCs due to the rising prevalence of LCC imports in the MNEs′ home markets. Building upon oligopolistic parallel behavior theory, we analyze the impact of lcc competition intensity and lcc product quality. 0 We test the model using data collected from a top management survey of 423 U.s. and German manufacturing firms. 0 the intensity of competition from lccs and the quality of products imported from lccs significantly explain MNEs′ subsequent responses to that competition. 0 cross-country comparisons show that while lcc product quality is important in both samples, the intensity of competition from LCCs is significant for MNEs′ future activities in lccs only in the U.s. sample. 0 a stronger prior orientation toward lccs and low logistics costs also lead to higher levels of future MNe activities in lccs, while technological progress does not.

Research Published in Management International Review from 2006 to 2020: A Bibliometric Analysis and Future Directions

“…These included the CSR issues in emerging markets and EMF internationalization. Other key topics included brand positioning and anti-counterfeit measures (Yang & Fryxell, 2009 ), response of MNEs to the low-cost imports in their home countries (Kaufmann & Körte, 2010 ), and trade disputes (Lindeque & McGuire, 2007 ). The research conducted during this time focused on the perspective of emerging markets and emerging market MNEs (EMNEs), rather than the developed market firms doing business in and with them.…”

How to measure competition? The role of price dispersion in B2B supply markets

“…Also in B2B environments, the production costs vary across the suppliers, potentially causing price dispersion. Nevertheless, the factor costs such as labor and capital are assumed to be comparable in industrialized countries (Kaufmann and Körte, 2010;Kogut, 1985), somewhat limiting the influence of this cause of price dispersion. Finally, literature suggests that price dispersion can partially be attributed to collusive behavior.…”

Mechanism design theory in buyer-supplier negotiations: designing incentive systems to achieve price reductions

“…Under high transaction orientation, negotiation rules can be designed that allow intense competition. Generally, competition helps to reduce purchasing prices (Gerardi & Shapiro, 2009;Kaufmann & Körte, 2010;Epifani & Gancia, 2011;Scheffler et al, 2016). Consequently, the more transactional a supply situation, the more meaningful a mechanism design-based negotiation will be.…”

“…In industrial purchasing settings, buying organizations can obtain improved purchasing prices by introducing competition in the supply base (Gerardi & Shapiro, 2009;Kaufmann & Körte, 2010;Epifani & Gancia, 2011;Scheffler et al, 2016). Interestingly, mechanism design-based negotiations also appear to be very effective in suggesting a high competitive intensity.…”