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).

Prospect theory, diversificação ingênua e propensão a risco de especialistas em mercado: evidência empírica no Brasil

The Prospect Theory is one of the basis of Behavioral Finance and models the investor behavior in a different way than von Neumann and Morgenstern Utility Theory. Behavioral characteristics are evaluated for different control groups, validating the violation of Utility Theory Axioms. Naïve Diversification is also verified, utilizing the 1/n heuristic strategy for investment funds allocations. This strategy causes different fixed and equity allocations, compared to the desirable exposure, given the exposure of the subsample that answered a non constrained allocation question. When compared to non specialists, specialists in finance are less risk averse and allocate more of their wealth on equity.

Trading up: the prospect of greater regulatory convergence in North America

Incluye Bibliografía

Innovation and economic development: theoretical retrospect and prospect

Includes bibliography

The prospect for equity

Includes bibliography

Prospect, evaluation and characterization of aeolian energy

Spanish version available

Prospect on intergalactic magnetic field measurements with gamma-ray instruments

Observing high-energy gamma-rays from Active Galactic Nuclei (AGN) offers a unique potential to probe extremely tiny values of the intergalactic magnetic field (IGMF), a long standing question of astrophysics, astropa rticle physics and cosmology. Very high energy (VHE) photons from blazars propagating along the line of sight interact with the extragalactic background light (EBL) and produce e + e − pairs. Through inverse-Compton interaction, mainly on the cosmic microwave background (CMB), these pairs generate secondary GeV-TeV compo- nents accompanying the primary VHE signal. Such secondary components would be detected in the gamma-ray range as delayed “pair echos” for very weak IGMF ( B< 10 − 16 G ), while they should result in a spatially extended ga mma-ray emission around the source for higher IGMF values ( B> 10 − 16 G ). Coordinated observations with space (i.e. Fermi) and ground- based gamma-ray instruments, such as the pre sent Cherenkov experiments H.E.S.S., MAGIC and VERITAS, the future Cherenkov Telescope Array (CTA) Observatory, and the wide-field detectors such as HAWC and LHAASO, should allow to analyze and finally detect such echos, extended emission or pair halos, and to further characterize the IGMF.