Resource title

Analysing foreign market entry: the choice between greenfield investment and acquisitions

Resource image

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Resource description

This paper formalises the choice a firm has to face when entering a foreign market via FDI as between setting up an entirely new plant (greenfield investment) or acquiring an existing indigenous firm. Our results show that in an asymmetric duopoly situation a new entrant will normally be best off by acquiring an existing indigenous low-technology firm, thus, forming a duopoly with an indigenous high-technology firm. While in welfare terms the entry of the foreign firm damages the country in most cases, there exist some possibilities that welfare, particularly after a greenfield investment by the foreign firm, is higher than before entry, even when there is full profit repatriation.

Resource author

Holger Görg

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/1282

Resource license

Adapt according to the presented license agreement and reference the original author.