Arbeitspapier

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

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.

Sprache
Englisch

Erschienen in
Series: Trinity Economic Papers Series, Technical Paper ; No. 1998,1

Klassifikation
Wirtschaft
Multinational Firms; International Business
Oligopoly and Other Imperfect Markets
Thema
Markteintritt
Direktinvestition
Duopol
Wohlfahrtseffekt
Theorie

Ereignis
Geistige Schöpfung
(wer)
Görg, Holger
Ereignis
Veröffentlichung
(wer)
Trinity College, Department of Economics
(wo)
Dublin
(wann)
1998

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Görg, Holger
  • Trinity College, Department of Economics

Entstanden

  • 1998

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