Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109729
Authors: 
Davies, Ronald B.
Desbordes, Rodolphe
Ray, Anna
Year of Publication: 
2015
Series/Report no.: 
Working Paper Series, UCD Centre for Economic Research 15/03
Abstract: 
Relying on a large foreign direct investment (FDI) transaction level dataset, unique both in terms of disaggregation and time and country coverage, this paper examines patterns in greenfield (GF) versus merger & acquisition (MA) investment. Although both are found to seek out large markets with low international barriers, important differences emerge. MA is more affected by geographic and cultural barriers and exhibits opportunistic behaviours as it is more sensitive to short-run changes, such as a currency crisis. On the other hand, GF is relatively driven by long-run factors, such as origincountry technological and institutional development or comparative advantage. These empirical facts are consistent with the conceptual distinction made between these two modes, i.e. MA involves transfer of ownership for integration or arbitrage reasons while GF relies on firms own capacities, which are linked to the origin countries attributes. They also suggest that GF and MA are likely to respond differently to policies intended to attract FDI.
Subjects: 
Foreign Direct Investment
Mergers and Acquisitions
Greenfield Investment
Multinational Firms
JEL: 
F21
F23
Document Type: 
Working Paper

Files in This Item:
File
Size





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