Technological knowledge intensity and entry modes in the European automotive industry Online publication date: Thu, 29-Jun-2023
by Pierre-André Buigues; Denis Lacoste
European J. of International Management (EJIM), Vol. 20, No. 3, 2023
Abstract: This research jointly considers the internationalisation literature on entry mode on the one hand and Technological Knowledge Intensity (TKI) on the other. We apply this approach to a specific industry, the European automotive industry. Entry modes (export or foreign direct investments) into foreign markets and the R&D strategies of the major European car manufacturers are analysed over an 11-year period. Three strategic groups are identified and the differences in TKI between these three groups are tested. The research indicates that firms with high (low) TKI favour exports (FDI) over FDI (export). The study also analyses the dynamic links between TKI and internationalisation. A decrease in TKI over time is associated with a decrease in export intensity and an increase of FDI. As the companies analysed in this study belong to a single industry in a homogeneous economic area, the effect of many variables is neutralised, enabling an in-depth understanding of the phenomena.
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