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Competing with multinational enterprises’entry: Search strategy, environmental complexity, and survival of local firms
Jie Wu1; Ka Fai Lao2; Feng Wan2; Jiatao Li3
2019-08
Source PublicationInternational Business Review
ISSN0969-5931
Volume28Issue:4Pages:727-738
Abstract

This 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.

KeywordSearch Strategy Foreign Entry Retrieval Capacity Nk Model Environmental Complexity
DOIhttps://doi.org/10.1016/j.ibusrev.2019.02.002
Indexed BySSCI ; SSCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectBusiness
WOS IDWOS:000472706200009
PublisherElsevier
Fulltext Access
Citation statistics
Cited Times [WOS]:2   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionDEPARTMENT OF MANAGEMENT AND MARKETING
Faculty of Business Administration
Corresponding AuthorJiatao Li
Affiliation1.Department of Management and Marketing, Faculty of Business Administration, University of Macau, Macau
2.Department of Electrical and Computer Engineering, Faculty of Science and Technology, University of Macau, Macau
3.School of Business and Management, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Jie Wu,Ka Fai Lao,Feng Wan,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 Jie Wu,Ka Fai Lao,Feng Wan,&Jiatao Li.(2019).Competing with multinational enterprises’entry: Search strategy, environmental complexity, and survival of local firms.International Business Review,28(4),727-738.
MLA Jie Wu,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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