Corporate strategic responses to foreign entry: insights from prospect theory

Purpose – The purpose of this paper is to address how firms adapt their product and geographic diversification as a response to foreign rivals penetrating their domestic market by adopting a behavioral perspective to understand firm-level strategic responses to foreign entry. Design/methodology/approach – The study proposes that strategic responses to foreign entry selected by domestic incumbents have both a framing component and a related, strategic choice component, with the latter including changes in product and geographic market diversification (though other more business strategy-related responses are also possible, e.g. in product pricing and marketing). This study tests a set of hypotheses building on panel data of large US firms. Findings – The study finds, in accordance with our predictions, that domestic incumbents reduce their product and geographic diversification when facing an increase in import penetration. However, when increased market penetration by foreign firms takes the form of FDI rather than imports, the corporate response appears to be an increase in product and geographic diversification, again in line with our predictions. Originality/value – The study develops a new conceptual framework that is grounded in prospect theory, but builds on recent insights from mainstream international strategic management studies (Bowen and Wiersema, 2005; Wiersema and Bowen, 2008).

Utilization of organic nitrogen by ectomycorrhizal fungi (Hebeloma spp.) of arctic and temperate origin

Arctic and temperate strains of Hebeloma spp. were grown in axenic culture on glutamic acid, alanine, lysine and NH4+ as sole sources of nitrogen (N), with excess carbon (C) or deficient C (supplied as glucose). Their ability to utilize seed protein as a natural N source was also assessed. All strains tested had the capacity to assimilate amino acids and generally utilized alanine and glutamic acid more readily than NH4+. Some strains were able to utilize amino C when starved of glucose C, and could mineralize amino-N to NH3-N. Arctic strains, in particular, appeared to be pre-adapted to the utilization of seed protein N and glutamic acid N, which is often liberated in high concentrations after soil freezing. The results are discussed in relation to their possible ecological importance.