The Effect of Firm and Host Country Characteristics on the Choice of Entry Mode: Empirical Evidence from Spanish Firms

Cristina López-Duarte () and Esteban García-Canal ()

Journal of Management & Governance, 2002, vol. 6, issue 2, 153-168

Abstract: When investing abroad firms must choose betweengoing alone or with a partner – the so-calledownership structure decision. Additionally,firms can enter a new country by acquisitionsor by greenfield investments – the foreignestablishment mode decision. These twodecisions have traditionally been analyzedseparately in the literature on entry mode.What is more, this literature has much lessanalyzed hybrid entry modes, like partialacquisitions. The aim of this paper is toanalyze how the different factors analyzed inprior research influence the choice of entrymode when jointly taking into account fouralternative entry modes: greenfield whollyowned subsidiaries, greenfield joint ventures,full acquisitions and partial acquisitions. Theempirical analysis was carried out byestimating a multinomial logit model over asample of FDIs made by Spanish firms. Ourresults also contribute to the knowledge ofspecific patterns in the choice of entry modeby firms from late investor countries, likeSpain. Copyright Kluwer Academic Publishers 2002

Keywords: entry mode; foreign direct investment; foreign establishment mode; ownership structure (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (2)

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DOI: 10.1023/A:1015708419745

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