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.
- Language
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Englisch
- Bibliographic citation
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Series: Trinity Economic Papers Series, Technical Paper ; No. 1998,1
- Classification
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Wirtschaft
Multinational Firms; International Business
Oligopoly and Other Imperfect Markets
- Subject
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Markteintritt
Direktinvestition
Duopol
Wohlfahrtseffekt
Theorie
- Event
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Geistige Schöpfung
- (who)
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Görg, Holger
- Event
-
Veröffentlichung
- (who)
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Trinity College, Department of Economics
- (where)
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Dublin
- (when)
-
1998
- Handle
- Last update
- 10.03.2025, 11:45 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Görg, Holger
- Trinity College, Department of Economics
Time of origin
- 1998