EUROPEAN LOW FARE AIRLINES' FDI-BASED MARKET ENTRY: AN EMPIRICAL ANALYSIS

摘要

In contrast to other industries;;the air transport sector has received little attention by scholarsinterested in internationalization strategies;;despite its fundamentally global character.We aim to bridge this gap in the literature by analyzing European low fare airlines’ use offoreign direct investments with a cross-sectional econometric study. Dunning’s Eclectic(OLI) Paradigm;;the most widely accepted framework in internationalization research;;serves as conceptual basis and is specified to the airline context. Using historical datafrom public sources;;industry databases;;and prior research;;we operationalize explanatoryvariables for 30 European low fare airlines and all their 226 foreign airport destinationsfor 2007. Logistic regression is employed to examine the effects of twelve firm- andlocation-specific OLI advantage factors on the establishment of bases at foreign airports;;which represents the dominant foreign-direct-investment-based internationalization strategypursued by low fare airlines. We are able to show significant effects of firm governanceproperties as well as availability and costs of labor at foreign airports. Based onthese findings;;we highlight implications on internationalization theory and aviation management.