Modeling International Expansion

Strategy deals with decisions about the scope of the firm and related choices about how to compete in various businesses. As such, research in strategy entails the analysis of discrete choices that may not be independent of each other. In this paper, we review the methodological implications of modeling such choices and propose conditional, nested, mixed logit, and hazard rate models as solutions to the issues that arise from non-independence among strategic choices. We describe applications with an emphasis on international strategy, an area where firms face a multiplicity of choices with respect to both location and mode of entry.

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