An FDI is an FDI is an FDI? The growth effects of greenfield investment and mergers and acquisitions in developing countries

Konferenzbeitrag

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Proceedings of the German Development Economics Conference, Berlin 2011 ; No. 38

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Multinational Firms; International Business ; Economic Growth of Open Economies ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
• Subject: Growth ; foreign direct investment ; mergers and acquisitions ; green-field investments

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Harms, Philipp ; Méon, Pierre-Guillaume
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/48294
• Last update: 10.03.2025, 11:42 AM CET