Abstract
Adopting a network perspective, we demonstrate that two different, yet complementary, forces influence the formation of trade and investment policy. One the one hand, nations that are trading partners develop similar policies through a process of close and enduring interaction. On the other hand, nations that compete for trading opportunities adopt comparable policies through a process of establishing similar types of relations with other nations, even though they may not have direct ties to each other. Implications for managers of multinational enterprises are developed.
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*Balaji R. Koka is a doctoral candidate in Strategic Management at the Katz School, University of Pittsburgh. His research focuses on understanding the effect of strategic alliances, inter-firm networks and the institutional context on firm performance.
**John E. Prescott is professor of Business Administration at the Katz School, University of Pittsburgh. His research focuses on the dynamics of networks and competitive intelligence. Currently, he is the editor of The Compelitive Intelligence Review.
***Ravindranath (“Ravi”) Madhavan is Assistant Professor in the Department of Business Administration at the University of Illinois, Urbana-Champaign. He received his Ph.D. in Strategic Management from the University of Pittsburgh in 1996. His research seeks to understand the effect of inter-firm networks on three key elements of competitive advantage - strategic focus (particularly focused organizational knowledge), flexibility, and foresight (strategic thinking in managers and firms).
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Koka, B., Prescott, J. & Madhavan, R. Contagion Influence on Trade and Investment Policy: A Network Perspective. J Int Bus Stud 30, 127–147 (1999). https://doi.org/10.1057/palgrave.jibs.8490063
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DOI: https://doi.org/10.1057/palgrave.jibs.8490063