Location choices of multinational firms in Europe: The role of EU cohesion policy

Using data on 5509 foreign subsidiaries established in 50 regions of 8 EU countries over the period 1991-1999, we estimate a mixed logit model of the location choice of multinational firms in Europe. In particular, we focus on the role of EU Cohesion Policy in attracting foreign investors from both within and outside Europe. We find that, after controlling for the role of agglomeration economies as well as a number of other regional and country characteristics and allowing for a very flexible correlation pattern among choices, Structural and Cohesion funds allocated by the EU to laggard regions have indeed contributed to attracting multinationals. These policies as well as other determinants play a different role in the case of European investors as opposed to non-European ones.     

Spatial competition with endogenous location choices: An application to discount retailing

This paper examines the importance of geographical differentiation in store location decisions of firms in the retail discount industry. Using a novel data set that includes the store locations and accompanying market conditions for all stores belonging to the Wal-Mart, Kmart, and Target chains, we study the factors that influence the entry and location decisions of these firms. The model involves an incomplete information game between the three players where each firm has private information about its own profitability. A key feature of our modeling approach is that it permits asymmetries across firms in the impact of exogenous market characteristics and competitive interaction effects. Variations in the exogenous firm specific characteristics, such as the distances from the market to firms’ headquarters and the nearest distribution centers, serve as exclusion restrictions and provide the source for model identification. Parameter estimates of the payoff functions are used to predict the equilibrium market structure under a variety of market conditions that provide insights into the competitive landscape of the industry. Results show that all firms exert a strong negative impact on competitors when they are in close proximity, but the effect decreases with distance to rivals suggesting strong returns to spatial differentiation in this industry. Target stores fare well under competition except when these competitors are in close proximity. Wal-Mart’s supercenter format is found to be the most formidable player as it substantially impacts competitors even at a large distance. We also find significant asymmetries across players in their response to market conditions and competition interactions.

Transnational corporations’ localization strategies via retail attributes: Focus on Chinese market

We explored the localization strategy of the transnational corporations (TNCs) in China by employing retail store attributes within the fast-changing Chinese retail market to select stores. We applied the multinomial logit (MNL) model based on McFadden’s (1974) random utility theory to proceed with this study. A questionnaire survey was conducted in nine areas in China. Surveys targeted people who had used Tesco, Walmart, and RT-Mart. 950 questionnaires were distributed, and 909 valid samples were obtained. The analysis results indicated that RT-Mart and Walmart, top players in the Chinese distribution industry, showed higher customer satisfaction in all sectors than Tesco, and statistically, all variables were significant. Customers of RT-Mart and Walmart were more satisfied compared with Tesco's customers in all variables, such as product quality, price, location, convenience, atmosphere, and staff service. In comparison to RT-Mart, Walmart had lower prices, fewer branches and convenience facilities, and lesser brand awareness, but the model estimates indicated that customer satisfaction was high regarding product quality, atmosphere, and employee service. In this study, various behavior factors were reviewed in consideration of consumer selection of stores; this aspect is significant because we have added attributes pertaining to the brand in our study.     

Optimizing and Evaluating Retail Assortments for Infrequently Purchased Products

This article develops a methodology for choosing optimal retail assortments for infrequently purchased products and assessing the robustness of such assortments with regard to shifts in customer preferences. The approach incorporates heterogeneous consumer preferences and uses integer programming to determine optimal retail assortments. The robustness of the resulting assortments is examined using alternative consumer choice assumptions and ranges of parameter values. The methodology is illustrated using adaptive conjoint data collected via the Internet and is assessed against the sales results from an assortment offered by a national retail chain.     

Firm heterogeneity and location choice of Chinese Multinational Enterprises (MNEs)

Using data on 194 location choices in 32 countries for a decade, we investigated locational determinants of Chinese Multinational Enterprises (MNEs). We found that State-Owned MNEs, compared to their peers without controlling state equity, are less concerned about political risk of the host country, but more responsive to favorable exchange rate between Chinese RMB and the host currency. Strategic intent of Chinese MNEs affects their location choice in a way that manufacturing oriented investment, compared to trading subsidiaries, is more attracted to countries with large market size and more deterred by high cost structure of the host country.     

SME foreign market entry mode choice and foreign venture performance: The moderating effect of international experience and product adaptation

Firms’ foreign market entry mode choice attracts considerable research attention. However, the performance implications of this choice remain inconclusive, particularly in the context of small and medium-sized enterprises (SMEs). The present paper draws on the resource-based view (RBV) and develops a theoretical model specifically tailored to the context of SMEs in order to study the relationship between entry mode choice and foreign venture performance. Testing hypotheses on 133 German SMEs, we show that international experience as a resource and product adaptation as a capability improve the performance of non-equity entry modes by mitigating liabilities of smallness inherent to SMEs. We furthermore find empirical support for the joint moderating effect of international experience and product adaptation on the focal relation. Our findings contribute to the SME foreign market entry mode literature and have implications for practitioners and future research.     

企业国际化经营的市场进入方式选择

随着世界经济一体化进程的加快和我国成功地加入世贸组织,企业越来越普遍地从事国际化经营活动。正确选择市场进入方式是企业国际化经营成败的关键。本文着重分析了影响进入方式选择的主要因素,并基于这一领域的交易成本理论、组织行为理论、折衷理论等尝试构建了一个企业国际化经营的进入方式综合决策模型,以期对我国企业实施“走出去”战略提供有益的借鉴。     

Host country’s environmental uncertainty,technological capability,and foreign market entry mode: Evidence from high-end equipment manufacturing MNEs in emerging markets

The paper investigates the impact of the host country’s environmental uncertainty on the choice of entry mode and also discusses the moderating role of technological heterogeneity in this relationship. Based on the resource-based view and institutional theory framework, we first analyze the investment motivation of emerging industries in emerging markets and evaluate the environmental uncertainty from two dimensions, including the institutional environment (country level) and industry environment (market level). Then, the theoretical predictions are empirically tested using 173 overseas investment events in China’s high-end equipment sector from 2010-2018. Our findings suggest that when the uncertainty of the industry environment is low, no matter how uncertain is the institutional environment, most firms tend to choose a cooperative strategy. Once the industry environment indicators become turbulent, a high degree of institutional environment uncertainty causes firms to evade trade barriers by choosing a new plant. Alternatively, choosing a relatively conservative mode, such as export. Meanwhile, technological capability weakens the influence of environmental uncertainty on entry mode.     

HEV Choice Models as a Search Engine for the Specification of Nested Logit Tree Structures

This paper illustrates how the heteroskedastic extreme value (HEV) model can serve as an effective search engine for identifying appropriate tree structures in hierarchical choice models, particularly the nested logit. This use of the HEV model exploits its ability to estimate unique variances, and hence unique scale parameters, for each alternative in a choice set. The analysis of variance can reveal tree structures that may not be obvious to analysts who tend to base their search strategy on intuitive tree structures. The reliance on behavioural intuition may miss out on the identification of the 'best' tree in an econometric sense. This note illustrates how the HEV model is used to search for the hierarchical domain in which a statistically preferred nested logit model is positioned.     

Entering China Today

Summary

The peripherally growing and remarkably dynamic Chinese economy is now encouraging the use of more diverse and creative entry modes for international investors. This article illustrates various entry modes of foreign direct investment available at present to foreign companies entering China. These entry modes include equity joint ventures, wholly foreign owned subsidiaries, contractual joint ventures, umbrella companies, acquisitions, representative offices, branches, build-operate-transfers, licensing and franchising. The merits and limitations of each entry mode are discussed. Some practical advice on entry strategies for international executives active in the Chinese market is also highlighted.     

国内外市场潜力对FDI区位选择的影响研究

本文运用1996-2008年全国276个地级及以上城市和39个我国主要贸易伙伴的面板数据,通过估计固定效应模型,研究了我国城市面对的市场潜力对在华FDI区位选择的影响。为了估计各种市场潜力对FDI流量的不同影响,将市场潜力分为国内和国外市场潜力,并且将国内市场潜力分为省内和省外市场潜力。本文发现一个城市面对的国内市场潜力和国外市场潜力都对该城市吸收FDI具有显著的促进作用,而前者对FDI流量的影响更大。另外,一个城市面对的来自本省的市场潜力将正向影响该城市吸收外资,但来自外省的市场潜力却对该城市的FDI流入无显著影响,这反映了我国国内市场存在分割。     

承接服务业国际转移:中国区位比较优势的实证

服务业离岸外移是当前国际产业转移的重要内容,抓住机遇承接服务业国际转移,提升自身的产业结构对于包括中国在内的发展中国家具有十分重要的战略意义。本文在回顾相关文献研究成果的基础上,利用面板数据模型对对华服务业直接投资的主要区位影响因素进行了实证研究,结果显示人均国内生产总值和人力资本存量是影响中国吸引服务业直接投资的重要区位因素。     

Hybrid Choice Models: Progress and Challenges

We discuss the development of predictive choice models that go beyond the random utility model in its narrowest formulation. Such approaches incorporate several elements of cognitive process that have been identified as important to the choice process, including strong dependence on history and context, perception formation, and latent constraints. A flexible and practical hybrid choice model is presented that integrates many types of discrete choice modeling methods, draws on different types of data, and allows for flexible disturbances and explicit modeling of latent psychological explanatory variables, heterogeneity, and latent segmentation. Both progress and challenges related to the development of the hybrid choice model are presented.     

The Effect of Attribute Variation on Consumer Choice Consistency

We study the effect of shifts in attribute level differences on consumer choice consistency. Choice consistency is measured as the variance of the random error component in the consumer utility function: the smaller this variance, the higher choice consistency. We hypothesize that due to increased choice difficulty, choice consistency decreases if attribute level differences increase while average utility level differences between alternatives remain the same. In our empirical illustration we focus on the impact of price level shifts on choice consistency in conjoint choice experiments. Our results show that choice consistency decreases as price level differences increase and absolute price levels increase.     

Models and optimal designs for conjoint choice experiments including a no-choice option

In a classical conjoint choice experiment, respondents choose one profile from each choice set that has to be evaluated. However, in real life, the respondent does not always make a choice: often he/she does not prefer any of the options offered. Therefore, including a no-choice option in a choice set makes a conjoint choice experiment more realistic. In the literature, three different models are used to analyze the results of a conjoint choice experiment with a no-choice option: the no-choice multinomial logit model, the extended no-choice multinomial logit model, and the nested no-choice multinomial logit model. We develop optimal designs for the two most appealing of these models using the D-optimality criterion and the modified Fedorov algorithm and compare these optimal designs with a reference design, which is constructed while ignoring the no-choice option, in terms of estimation and prediction accuracy. We conclude that taking into account the no-choice option when designing a no-choice experiment only has a marginal effect on the estimation and prediction accuracy as long as the model used for estimation matches the data-generating model.     

Logit模型在市场营销定量研究中的应用——消费者对家电品牌选择的实证分析

市场营销的定量研究以及如何开启消费者的行为黑箱,一直以来都是国外市场营销研究者们长期并将继续深入探讨的核心主题。在此过程当中,Logit模型是他们比较青睐和广泛采用的一类研究工具。通过对Logit模型的原理的介绍,以及将这一模型用于国内消费者对某一家电品牌选择的实证研究,从而表明Logit模型能够用于分析市场营销研究中的诸多问题,并且能够揭示出更多有用的量化信息,而这对于市场营销的学术研究和市场营销管理的实践都无疑是大有裨益的。     

Habit Persistence in Time Series Models of Discrete Choice

We provide a framework for modelling habit persistence in choice that integrates vector auto-regressive and moving-average (VARMA) time-series models with random coefficient Multinomial Probit (MNP) models. We provide two classes of models. In the first we assume that the error in the utility function has a general VARMA structure, and in the second we assume that structure for the regression coefficients. We provide an interpretation of these two classes of models. As an illustration, we re-analyse the A.C. Nielsen Company 1986/1987 scanner panel data on ketchup purchases and compare our model with two alternative state dependence models.     

我国对外直接投资的区位选择——基于投资动机的视角

从对外直接投资动机的视角,采用54国2003-2006年的面板数据,在对样本国聚类的基础上考察了我国对外直接投资区位选择的影响因素。发现在控制了东道国治理基础和双边贸易量后,对我国直接投资而言,发达国家的区位优势在于较高的科技水平,而发展中国家则在于丰富的矿产能源禀赋或潜在的国内市场。同时,发达国家的市场对我国直接投资并不具有吸引力,而在对一些资源丰富的发展中国家进行投资时市场因素的作用也不明显。     

A nested logit model of brand choice incorporating variety-seeking and marketing-mix variables

We model the effects of variety-seeking and marketing-mix variables on consumers' purchases of coffee using a nested logit model. We premise that on any given purchase occasion, the utilities of brands other than the one purchased on the previous occasion may be correlated due to the consumer's tendency to seek variety or to avoid variety. This results in a two-level hierarchical model where choice on any purchase occasion is conditioned on the brand purchased on the immediately preceding occasion. Such a structure accounts for variety seeking and inertia tendencies of consumers and is consistent with a hierarchical decision process, where consumers first decide whether or not to make a repeat purchase and then decide which brand size to purchase. The assumed hierarchical structure is shown to be consistent with observed coffee purchase behavior, and the model is shown to outperform a nonhierarchical logit model in predicting consumers' brand choices.     

污染密集型产业对华转移的区位决定因素分析

发生于我国的跨境污染已从早期的洋垃圾进口,发展到输入污染技术设备乃至整个产业,致使其造成的环境损害愈发难于治理。本文运用条件LOGIT模型及我国的FDI数据,对影响污染密集型产业FDI区位选择的因素进行了评价。研究发现:政府环境管制、产业聚集效应、企业所有制结构及地区特征等因素,均不同程度地作用于污染密集型产业对华转移的区位选择倾向,且在诸多因素中,政府环境管制具有很明显的抑制作用。结论表明:有必要根据中国经济社会持续发展的质量要求,配合产业政策调整制定有效的环境政策,严格控制污染密集型产业对华转移。