In:
The Manchester School, Wiley, Vol. 83, No. 6 ( 2015-12), p. 725-748
Abstract:
We discuss entry strategy of a foreign multinational into a local market with initially two asymmetric local firms. We show that greenfield investment occurs when both local cost asymmetry and subsidiary set up cost are small, exporting occurs when both trade cost and technology gap are low, otherwise acquisition occurs. Under acquisition equilibrium the less efficient firm is acquired unless the cost of technology transfer is large enough. We focus on the process of selection of the target firm by constructing sequential offer game, bidding game and repeated offer game. However, the MNC's entry always reduces host country welfare.
Type of Medium:
Online Resource
ISSN:
1463-6786
,
1467-9957
DOI:
10.1111/manc.2015.83.issue-6
Language:
English
Publisher:
Wiley
Publication Date:
2015
detail.hit.zdb_id:
1418920-3
detail.hit.zdb_id:
1473781-4
SSG:
3,4
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