Asset Ownership and Foreign-Market Entry

Horst Raff, Michael Ryan and Frank Stähler

No 2006-01, Economics Working Papers from Christian-Albrechts-University of Kiel, Department of Economics

Abstract: This paper examines the link between a firm's owership of productive assets and its choice of foreign-market entry strategy. We find that, controlling for industry- and country-specific characteristics, the most productive firms (i.e., those owning the most assets) will enter through greenfield investment, less productive ones will choose M&A, and the least productive ones will export. In addition, the most productive firms are shown to prefer whole ownership to a joint venture. These predictions are confirmed in an econometric analysis of Japanese firm-level data.

Keywords: Foreign direct investment; merger and acquisition; joint venture; greenfield investment; firm heterogeneity; productivity (search for similar items in EconPapers)
JEL-codes: F12 F15 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-com and nep-cse
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Asset Ownership and Foreign-Market Entry (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauewp:3875

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