unobservability of contract terms favor cross-border acquisition relative to greenfield investment. We also show that while a cross …-border acquisition reduces welfare, greenfield investment can be welfare-improving. These results suggest that policy should distinguish …

. Therefore two alternative modes are distinguished: Greenfield investment, i.e. investment in a new facility, or acquisition of …

for a foreign direct investment are considered: Greenfield investment versus acquisition. In contrast to existing … approaches, the acquisition price and the profits under both entry modes are endogenously determined. Interestingly, we find that … it is acquisition. …

for a foreign direct investment are considered: Greenfield investment versus acquisition. In contrast to existing … approaches, the acquisition price and the profits under both entry modes are endogenously determined. Interestingly, we find that … it is acquisition. …

for a foreign direct investment are considered: Greenfield investment versus acquisition. In contrast to existing … approaches, the acquisition price and the profits under both entry modes are endogenously determined. Interestingly, we find that … it is acquisition. …

unobservability of contract terms favor cross-border acquisition relative to greenfield investment. We also show that while a cross …-border acquisition reduces welfare, greenfield investment can be welfare-improving. These results suggest that policy should distinguish …