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The New Agenda for FDI: Evidence from South Korea and Germany

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  • Gilroy, Bernard Michael
  • Lukas, Elmar

Abstract

The purpose of this study is to find reasonable explanations why cross-border acquisitions of foreign firms are often the preferred strategy to enter new markets. Furthermore, we formalize the choice of market entry strategy for an individual multinational enterprise (MNE) from a dynamic perspective. It is argued that, incorporating a suitable treatment irreversibility, uncertainty and flexibility related to an MNEs invetsment decision will show, that future investment opportunities play an important role when it comes to deciding whether to enter the new market via greenfield or acquisition. We also briefly discuss stylized facts given evidence from South Korea and Germany.

Suggested Citation

  • Gilroy, Bernard Michael & Lukas, Elmar, 2002. "The New Agenda for FDI: Evidence from South Korea and Germany," MPRA Paper 17970, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17970
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    References listed on IDEAS

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    Cited by:

    1. Gilroy, Bernard Michael & Lukas, Elmar, 2004. "Optionen der Internationalisierung: Motive ausländischer Direktinvestitionen in einem neuen Licht [Options of internationalisation: motives for foreign direct invetsment in a new light]," MPRA Paper 21539, University Library of Munich, Germany.

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    More about this item

    Keywords

    Foreign Direct Investment; multinational enterprise; sequential investments; entry mode; greenfield investments; cross-border acquisitions;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • F2 - International Economics - - International Factor Movements and International Business

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