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The Macroeconomic Determinants of Cross Border Mergers and Acquisitions and Greenfield Investments

Paula Neto (), Antonio Brandao and António Cerqueira ()
Additional contact information
Paula Neto: ISCA, University of Aveiro
António Cerqueira: FEP, University of Porto

No 17, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: When a company decides to invest abroad, it can do it through the establishment of a new firm (greenfield investment) or by the purchase of an already existing firm. Although there is a vast empirical literature on the macroeconomic determinants of aggregate FDI, there are just a few studies examining the location-specific determinants of each entry mode. The aim of this study is to extend the previous work by Globerman and Shapiro (2005) through the analysis of panel data of 53 countries over the period 1996-2006, in order to identify the potential location-specific determinants of both M&A and greenfields. We have found evidence that there is a group of mode-encompassing variables which are common to all entry modes (such as economy’s size, openness, governance and human development index) and mode-specific variables. Investor’s protection and cultural variables seem to play an important role in the explanation of M&A and greenfields, respectively.

Keywords: Foreign Direct Investment; Cross Border Mergers and Acquisitions; Greenfield Investments. (search for similar items in EconPapers)
JEL-codes: F23 F40 G34 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2009-08, Revised 2009-08
New Economics Papers: this item is included in nep-com, nep-int, nep-mac and nep-sbm
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http://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_17.pdf First version, 2009 (application/pdf)

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Working Paper: The Macroeconomic Determinants of Cross Border Mergers and Acquisitions and Greenfield Investments (2008) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0017

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