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Competing with multinational enterprises’ entry: Search strategy, environmental complexity, and survival of local firms
Wu,Jie1; Lao,Ka Fai2; Wan,Feng2; Li,Jiatao3
2019-08-01
Source PublicationInternational Business Review
ISSN0969-5931
Volume28Issue:4Pages:727-738
AbstractThis study examines the competitive dynamics between foreign and local firms. We posit that multinational enterprises (MNEs)’s entry in foreign markets significantly reduces the survival rate of local firms in the short term, but that this effect gradually diminishes over time. The proposed conceptual framework is operationalized through the combination of the widely used agent-based model and the economic model of competition. The agent-based model allows us to study the behavior of firms under the context of different markets and the environmental complexity while the competition model determines the competition between firms as well as the entry and exit of firms. Our results obtained from the simulation study reveal that the negative effect of foreign entry is heightened as environmental complexity increases. However, local firms with a broader knowledge search are better able to confront the negative impact of foreign entry over time. We also find that the negative effect of foreign entry on the survival of local firms is weaker for local firms with a strong retrieval capacity.
KeywordEnvironmental complexity Foreign entry NK model Retrieval capacity Search strategy
DOI10.1016/j.ibusrev.2019.02.002
URLView the original
Language英语
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Cited Times [WOS]:5   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionUniversity of Macau
Corresponding AuthorLi,Jiatao
Affiliation1.Department of Management and Marketing,Faculty of Business Administration,University of Macau,Macao
2.Department of Electrical and Computer Engineering,Faculty of Science and Technology,University of Macau,Macao
3.School of Business and Management,Hong Kong University of Science and Technology,Kowloon,Clear Water Bay,Hong Kong
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Wu,Jie,Lao,Ka Fai,Wan,Feng,et al. Competing with multinational enterprises’ entry: Search strategy, environmental complexity, and survival of local firms[J]. International Business Review,2019,28(4):727-738.
APA Wu,Jie,Lao,Ka Fai,Wan,Feng,&Li,Jiatao.(2019).Competing with multinational enterprises’ entry: Search strategy, environmental complexity, and survival of local firms.International Business Review,28(4),727-738.
MLA Wu,Jie,et al."Competing with multinational enterprises’ entry: Search strategy, environmental complexity, and survival of local firms".International Business Review 28.4(2019):727-738.
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