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Factors Affecting Perceptions of the Choice between Acquisition and Greenfield Entry: The Case of Western FDI in an Emerging Market

Management international review, 2008-01, Vol.48 (1), p.5-38 [Peer Reviewed Journal]

2008 Betriebswirtschaftlicher Verlag Dr. Th. Gabler/GWV Fachverlage GmbH ;Gabler Verlag 2008 ;COPYRIGHT 2008 Gabler Verlag ;Copyright Betriebswirthschaftlicher Verlag 2008 ;ISSN: 0938-8249 ;EISSN: 1861-8901 ;DOI: 10.1007/s11575-008-0002-3 ;CODEN: MINRAY

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Title:
Factors Affecting Perceptions of the Choice between Acquisition and Greenfield Entry: The Case of Western FDI in an Emerging Market
Author: Demirbag, Mehmet ; Tatoglu, Ekrem ; Glaister, Keith W.
Subjects: Acquisitions ; Analysis ; Business and Management ; Business Strategy/Leadership ; Business structures ; Economic growth ; Economic resources ; Emerging markets ; Emerging Markets/Globalization ; Equity ; Financial institutions ; Financial investments ; Foreign direct investment ; Foreign investment ; Foreign investments ; Host country ; Industrial production ; Institutional investments ; Institutionalism ; Investment decision ; Investment risk ; Investment strategies ; Investments ; Investors ; Market economies ; Market entry ; Multinational corporations ; Operations Management ; Organization ; Organization theory ; Privatization ; Regression analysis ; Research methodology ; Risk ; Strategic planning ; Studies ; Transaction costs ; Turkey
Is Part Of: Management international review, 2008-01, Vol.48 (1), p.5-38
Description: This study provides a comprehensive account of foreign establishment mode strategies of firms investing in Turkey. The results of the logistic regression modeling provide support to the hypothesized relationships that take into account the impact of host country specific motives of MNEs on their choice between acquisitions and greenfield investments. The host country motives quality of inputs and market potential have significant negative coefficients, indicating that an MNE will favor the acquisition mode over a greenfield mode as the relative importance of both motives increases. The host country motive of investment risk has a significant positive coefficient, which increases the likelihood of the venture being a greenfield investment. Our results also show that the main investing firm specific and subsidiary level determinants of FDI modal choice identified in prior research also influence the establishment mode choice of Western MNEs when investing in Turkey. Parent diversity, previous commercial association, ownership pattern and resource-intensiveness of the target industry have the expected impact on the foreign investor's choice between a greenfield investment and an acquisition. No support is found, however, for the impact of cultural distance and foreign parent size on establishment mode choice. Similarly, the control variables of home region of the investing firm, timing of entry and industrial sector of investment do not affect modal choice.
Publisher: Wiesbaden: Gabler Verlag
Language: English
Identifier: ISSN: 0938-8249
EISSN: 1861-8901
DOI: 10.1007/s11575-008-0002-3
CODEN: MINRAY
Source: ProQuest Central

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Factors Affecting Perceptions of the Choice between Acquisition and Greenfield Entry: The Case of Western FDI in an Emerging Market

2008 Betriebswirtschaftlicher Verlag Dr. Th. Gabler/GWV Fachverlage GmbH ;Gabler Verlag 2008 ;COPYRIGHT 2008 Gabler Verlag ;Copyright Betriebswirthschaftlicher Verlag 2008 ;ISSN: 0938-8249 ;EISSN: 1861-8901 ;DOI: 10.1007/s11575-008-0002-3 ;CODEN: MINRAY

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