Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/1282
Authors: 
Görg, Holger
Year of Publication: 
1998
Series/Report no.: 
Trinity Economic Papers Series, Technical Paper / Trinity College 1998,1
Abstract: 
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.
JEL: 
F23
L13
Document Type: 
Working Paper

Files in This Item:
File
Size
130.67 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.