This paper studies the entry decision of a multinational enterprise into a foreign market. Two alternative entry modes for a foreign direct investment are considered: Greenfield investment versus acquisition. In contrast to existing approaches, the acquisition price and the profits under both entry modes are endogenously determined. Interestingly, we find that the optimal entry mode decision is...

Malaysia is reliant on the availability of generic medicines to contain the rising national pharmaceutical expenditure. This paper assesses the factors determining the market entry of a new generic medicine following patent expiration on the innovator product in Malaysia. Data were gathered by using mail survey approach. The prevalidated Likert-scale questionnaire was mailed to all licensed mem...

Private insurance firms participating in Medicare can offer up to three principal plan types: coordinated care plans (CCPs), prescription drug plans (PDPs), and private fee-for-service (PFFS) plans. Firms can make entry and marketing decisions separately across plan types and geographic regions. In this study, we estimate firm-level models of Medicare private plan entry using data from the year...

This paper investigates how an incumbent monopolist can weaken potential rivals or deter entry in the output market by manipulating the access of these rivals in the input market. We analyze two polar cases. In the first one, the input market is assumed to be competitive with the input being supplied inelastically. We show that this situation opens the door to entry deterrence. Then, we assume ...

The negative effects of intellectual property protection (IPP) on trade volume have been found in the literature when market power effects dominate market expansion effects. Because both effects will increase profits, IPP will induce entry without ambiguity. However, using product-level entry data, negative effects on market supply are found after controlling for country-specific effects. An ex...

∗∗: Universal service obligations are usually not competitively neutral as they modify the way firms compete in the market. In this paper, we consider a continuum of local markets in a dynamic setting with a stochastically growing demand. The incumbent must serve all markets (ubiquity) possibly at a uniform price and an entrant decides on its market coverage before firms compete in prices. Conn...

Classroom market experiments can complement the theoretical orientation of standard industrial organization courses. This paper describes various experiments designed for such courses, and presents details of a multi-market game with entry and exit. In this experiment incumbents have a cost advantage in their ‘home’ markets, and mobile firms decide which market to enter. After entry decisions a...

We examine how universal service provisions and price restrictions across markets impact strategic entry and pricing. We develop a simple multi-market model with an oligopolistic (profitable) urban market and entry auctions for (unprofitable) rural service. Cross-market price restrictions induce a firm operating in both markets to become a ‘softer’ competitor, thus placing the firm at a strateg...

This study provides empirical findings on determinants of mobile network operators’ (MNO) choices of cross-border entry modes. Arguments mainly from transaction cost theory are used to derive hypotheses and research questions on factors explaining entry mode selection decisions between (1) minority versus majority equity share purchases, and (2) engagements in established operations versus gree...