An International Comparison of FDI Entry Mode (Japanese)

Yukiko Saito and Haruka Takayama

Policy Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: There are two types of FDI entry modes. The first is greenfield FDI (i.e., an investing firm builds a new foreign affiliate), and the other is cross-border M&A or brownfield FDI (i.e., an investing firm acquires an existing local firm). We investigate how firms choose between entry modes and compare the choices of Japanese, US, German and Chinese firms. Our empirical analysis suggests that more productive Japanese firms choose cross-border M&A rather than greenfield FDI. This evidence contrasts with the existing literature, specifically, Nocke and Yeaple (2008), which suggests that more productive firms conduct greenfield FDI rather than cross-border M&A.

Pages: 19 pages
Date: 2020-07
New Economics Papers: this item is included in nep-bec, nep-int and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:eti:rpdpjp:20017

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