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Proceedings of the German Development Economics Conference, 2011 (Berlin) >
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http://hdl.handle.net/10419/48294
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| Title: | | An FDI is an FDI is an FDI? The growth effects of greenfield investment and mergers and acquisitions in developing countries  |
| Authors: | | Harms, Philipp Méon, Pierre-Guillaume |
| Issue Date: | | 2011 |
| Series/Report no.: | | Proceedings of the German Development Economics Conference, Berlin 2011 38 |
| Abstract: | | We explore the effect of foreign direct investment (FDI) on economic growth in developing countries, distinguishing between mergers and acquisitions (M&As) and Greenfield investment. We find that these two types of FDI differ substantially with respect to their influence on growth. While Greenfield FDI substantially enhances growth, M&As have no effect, at best. We also demonstrate that, in contrast to Greenfield FDI, a larger volume of M&As results in an appreciated real exchange rate. The resulting loss in price competitiveness may explain the poor growth effect of the M&A variant of FDI. |
| Subjects: | | Growth foreign direct investment mergers and acquisitions green-field investments |
| JEL: | | F21 F23 F43 O16 |
| Document Type: | | Conference Paper |
| Appears in Collections: | | Proceedings of the German Development Economics Conference, 2011 (Berlin)
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