Multinational firms can enter a foreign market by taking over existing local firms (acquisitions) or by setting up new ventures (greenfield investments). Surprisingly, there has been limited empirical work on this topic. This paper examines the determinants of this choice by looking at Japanese...

Purpose: The purpose of this paper is to show that existing theories, principally Dunning’s OLI model, Mathews LLL model and Rugman’s version of internalization theory are unable to explain the rise of emerging market multinationals (EMNEs). The reason is that they over-emphasize the...

Purpose: This study aims to examine how the effect of host country formal institutional uncertainty on the percentage of equity sought in cross-border acquisitions (CBAs) is moderated by the host country industry (i.e. targets from the technology versus those from the non-technology industry)....

The theory of entry mode choice has modeled that choice as solely determined by the foreign investor. Hennart's bundling model, on the other hand, argues that foreign entry into a host market involves the bundling of intangibles contributed by the foreign investor with local complementary inputs...

We study the effects of linguistic distance and lingua franca proficiency on the equity stake taken by acquirers from 67 countries in 59,092 acquisition targets in 69 host countries. We theorize and find that acquirers take lower equity stakes in foreign targets when linguistic distance and...

This paper tests the proposition that national origin affects the strategies of multinational enterprises by looking at the determinants of the choice they make between entering the United States through partially versus wholly owned subsidiaries. We pool entries into the United States made by...

Many international business (IB) studies have used foreign direct investment (FDI) stocks to measure the aggregate value-adding activity of multinational enterprises (MNE) affiliates in host countries. We argue that FDI stocks are a biased measure of that activity, because the degree to which...

This paper uses transaction costs theory is used to explain the features of the new contractual alternatives to foreign direct investment (the “new forms”), to assess their efficiency, and to forecast their future development.© 1989 JIBS. Journal of International Business Studies (1989) 20,...

Prior research has argued that multinational enterprises (MNEs) prefer to enter culturally distant countries through greenfields rather than through acquisitions, since acquisitions in such countries are costlier to manage. This argument contains two hidden assumptions: (1) the additional costs...

This paper reviews the empirical literature on the determinants of the choice by multinational enterprises between entering foreign countries through greenfields or acquisitions. We discuss and compare the main theoretical perspectives used, provide a detailed overview of the empirical findings,...