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Analysing foreign market entry : the choice between greenfield investment and acquisitions

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dc.creator Görg, Holger
dc.date 2000
dc.date.accessioned 2013-10-16T06:01:43Z
dc.date.available 2013-10-16T06:01:43Z
dc.date.issued 2013-10-16
dc.identifier Journal of economic studies 0144-3585 27 2000 3 169-181
dc.identifier doi:10.1108/EUM0000000005350
dc.identifier http://hdl.handle.net/10419/2474
dc.identifier ppn:319187594
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/2474
dc.description 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. We assume the existence of an asymmetric duopoly in the host country, and these duopolists face the entry of a technologically advanced foreign firm in the market. The analysis shows how different constellations of entry costs and the post-entry competition affect the foreign firm's entry mode choice. Simulation results show that the foreign entrant will in most cases be best off by acquiring an existing indigenous high-technology firm, thus, forming a duopoly with an indigenous low-technology firm. We also discuss briefly the strategic dimension to the model, where the foreign firm has the possibility of crowding out the indigenous incumbents through lowering the price.
dc.language eng
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject ddc:330
dc.subject Market Entry;
dc.subject Markteintritt
dc.subject Direktinvestition
dc.subject Duopol
dc.subject Wohlfahrtseffekt
dc.subject Theorie
dc.title Analysing foreign market entry : the choice between greenfield investment and acquisitions
dc.type doc-type:article

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