An oligopolistic reaction is a concept from

economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

introduced by Frederick T. Knickerbocker (''Oligopolistic Reaction and Multinational Enterprise'', Cambridge, MA:

Harvard University Press Harvard University Press (HUP) is a publishing house established on January 13, 1913, as a division of Harvard University, and focused on academic publishing. It is a member of the Association of American University Presses. After the retirem ...

, 1973) to explain why firms follow rivals into foreign markets. Under conditions of growth in an economy, US firms match the investments of competitors into that economy. Also called follow-the-leader behavior. Used to understand the global flows of

foreign direct investment A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct co ...

s (FDI) and thereby the structure of the

world economy The world economy or global economy is the economy of all humans of the world, referring to the global economic system, which includes all economic activities which are conducted both within and between nations, including production, consumption, ...

See also