File Download
There are no files associated with this item.
Links for fulltext
(May Require Subscription)
- Publisher Website: 10.1016/j.euroecorev.2021.104016
- Scopus: eid_2-s2.0-85124239190
- WOS: WOS:000788078700013
Supplementary
- Citations:
- Appears in Collections:
Article: Learning and Information Transmission within Multinational Corporations
Title | Learning and Information Transmission within Multinational Corporations |
---|---|
Authors | |
Issue Date | 2022 |
Citation | European Economic Review, 2022, Forthcoming, p. 104016 How to Cite? |
Abstract | Firms face substantial uncertainty when doing business in new markets. We propose that multinational firms use “cross-market learning” to resolve such uncertainties. We develop a model of firm-level expectations formation with noisy signals from multiple markets and derive predictions on market entries and expectations formation over the firm’s life cycle. Using a novel dataset of Japanese multinational corporations that includes sales expectations of each affiliate, we provide supportive evidence for the model’s predictions. We find that firms rely on their performance in nearby markets to predict their profitability in a new market and make entry decisions. Such “cross-market” learning is less important after the firm has accumulated experience in the new market, but becomes more important if the uncertainty of the focal market is high or the firm has received more signals from the nearby markets. |
Persistent Identifier | http://hdl.handle.net/10722/310468 |
ISI Accession Number ID |
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Chen, C | - |
dc.contributor.author | Sun, C | - |
dc.contributor.author | Zhang, H | - |
dc.date.accessioned | 2022-02-07T07:57:05Z | - |
dc.date.available | 2022-02-07T07:57:05Z | - |
dc.date.issued | 2022 | - |
dc.identifier.citation | European Economic Review, 2022, Forthcoming, p. 104016 | - |
dc.identifier.uri | http://hdl.handle.net/10722/310468 | - |
dc.description.abstract | Firms face substantial uncertainty when doing business in new markets. We propose that multinational firms use “cross-market learning” to resolve such uncertainties. We develop a model of firm-level expectations formation with noisy signals from multiple markets and derive predictions on market entries and expectations formation over the firm’s life cycle. Using a novel dataset of Japanese multinational corporations that includes sales expectations of each affiliate, we provide supportive evidence for the model’s predictions. We find that firms rely on their performance in nearby markets to predict their profitability in a new market and make entry decisions. Such “cross-market” learning is less important after the firm has accumulated experience in the new market, but becomes more important if the uncertainty of the focal market is high or the firm has received more signals from the nearby markets. | - |
dc.language | eng | - |
dc.relation.ispartof | European Economic Review | - |
dc.title | Learning and Information Transmission within Multinational Corporations | - |
dc.type | Article | - |
dc.identifier.email | Sun, C: sunc@hku.hk | - |
dc.identifier.authority | Sun, C=rp02308 | - |
dc.identifier.doi | 10.1016/j.euroecorev.2021.104016 | - |
dc.identifier.scopus | eid_2-s2.0-85124239190 | - |
dc.identifier.hkuros | 331783 | - |
dc.identifier.volume | Forthcoming | - |
dc.identifier.spage | 104016 | - |
dc.identifier.epage | 104016 | - |
dc.identifier.isi | WOS:000788078700013 | - |