Greenfield joint ventures versus partial acquisitions: determinants of collaborative entry strategies of Finnish multinational enterprises

This chapter offers a relatively unique perspective to analysis of market entry strategies of multinational enterprises (MNEs) by specifically addressing equity based collaborative entry strategies. The past literature has either concentrated on establishment mode strategy (greenfield investment versus acquisition) or ownership mode strategy (wholly owned subsidiaries versus joint ventures) of MNEs. Our study specifically addresses firm-, industry- and country-level determinants of the choice between partial acquisition or greenfield joint venture (JV) by the MNEs. The chapter contributes to extant IB literature by being one of the first studies to address determinants of collaborative entry strategy of MNEs based on multiple theoretical lenses, as well as clearly showing the uniqueness of such entry strategies compared with past studies where these issues were addressed generally by putting them in either establishment or ownership mode analysis. The empirical sample of the study is based on 670 collaborative market entries by Finnish MNEs in 30 various developed and emerging economies. The in-depth empirical analysis offered in the study revealed variance in significance of determinants based on timing of investments as well as the level of ownership of Finnish MNEs in the collaborative venture (that is, minority, equal or majority ownership).