Escolar Documentos
Profissional Documentos
Cultura Documentos
Other Theories
The Knickerbocker's follow-the-leader theory argued that, as risk minimizers,
oligopolist, wishing to avoid destructive competition, would normally follow
each other into (e.g., foreign) markets, to safeguard their own commercial
interests.
This theory is considered defensive because competitors are investing to avoid
losing the markets served by exports when their initial investor begins local
production. They may also fear that the initiator will achieve some advantage of
risk diversification that they will have unless they also enter the market.
Cross Investment Theory
(E. M. Graham). Graham noted a tendency for cross investment by European
and American firms in certain oligopolistic industries; that is, European firms
tended to invest in the United States when American companies had gone to
Europe.
He postulated that such investments would permit the American subsidiaries of
European firms to retaliate in the home market of U.S. companies if the
European subsidiaries of these companies initiated some aggressive tactic, such
as price cutting, in the European market.