UK direct investment in the United States: a mode of entry analysis

Peter Nisbet, Wayne Thomas and Stuart Barrett

International Journal of the Economics of Business, 2003, vol. 10, issue 3, 245-259

Abstract: This article investigates the reasons underlying the high propensity of UK firms to directly invest in the United States via acquisition and merger. Using a binomial logit model, this study analyses data from 142 firms in five industrial sectors over the period 1984-1994. Together, these sectors account for more than 80% of UK foreign direct investment (FDI) in the sample period. The results highlight the role of diversification in explaining this behaviour. In contrast, the relative lack of evidence to support the role of exchange rates and leverage in influencing the decision to merge/acquire continues to fuel division as to the role of capital market imperfections in determining mode of entry.

Keywords: Foreign Direct Investment; Mode of Entry (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (5)

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DOI: 10.1080/1357151032000126229

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