The patterns used by international firms to substitute modes of entry in foreign product markets could be incremental in the chain from exporting to investment incremental pattern or could be haphazard and unpredictable nonincremental pattern. This study develops models representing the substitution patterns then tests them using data on exporting, licensing and investments flows of U.S. manufacturing firms to Western Europe during the 198088 period. The findings suggest that U.S. manufacturing firms at the aggregate level used the nonincremental pattern.
International Journal of Commerce and Management – Emerald Publishing
Published: Mar 1, 1992