Switching Options and Foreign Entry Decisions: The Role of Portfolio Configuration

Time：May 7th (Thursday) 10am -12noon

Location: Zhifuxuan, National School of Development, Peking U.

Speaker: Wu, Shubin, Associate Professor, School of International Business Administration, Shanghai University of Finance & Economics

 

 

Abstract：

Research on foreign market entry has rarely considered that multinational firms’ new entry decisions may be affected by the configuration of their existing portfolio of affiliates. We argue that in making entry decisions, firms take into account the contribution that an entry into a new location makes towards increasing the operational flexibility of their manufacturing affiliate portfolios. Such increase in operational flexibility derives from the enhanced options to switch operation across internationally dispersed affiliates in case of diverging labor cost developments. Analysis of the foreign entry decisions of the population of publicly-listed Japanese manufacturing multinationals strongly supports this notion and also establishes some boundary conditions to the effect of operational flexibility on entry. We discuss our study’s implications for research on entry and real options.

 

吴树斌，上海财经大学企业战略和国际商务副教授，2011年9月毕业于比利时鲁汶大学，在Strategic Management Journal等国内外杂志发表论文10余篇，曾获Temple/AIB Best Paper Award-Nominee等多项国内外科研奖励，现为AIB，AJBS和IACMR国际协会会员，担任多家国际学术期刊匿名评审。