Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104102
Authors: 
Müller, Thomas
Year of Publication: 
2002
Series/Report no.: 
Munich Discussion Paper 2002-8
Abstract: 
This paper studies the effect of technology spillovers on the entry decision of a multinational enterprise into a foreign market. Two alternative entry modes for a foreign direct investment are considered: Greenfield investment versus acquisition. We find that with quantity competition a spillover makes acquisitions less attractive, while with price competition acquisitions become more attractive. Asymmetric information about potential spillovers always reduces the number of acquisitions independently of whether the host country or the entrant has private information. Interestingly, we find that asymmetric information always hurts the entrant, while it sometimes is in favor of the host country.
Subjects: 
Foreign direct investment
multinational enterprise
enty mode
technology spillovers
asymmetric information
transition economies
JEL: 
D43
F21
F23
L13
P31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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