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Mergers and acquisitions and greenfield foreign direct investment in selected ASEAN countries


Moghadam, Alireza Tavakol and Mazlan, Nur Syazwani and Chin, Lee and Ibrahim, Saifuzzaman (2019) Mergers and acquisitions and greenfield foreign direct investment in selected ASEAN countries. Journal of Economic Integration, 34 (4). pp. 746-765. ISSN 1225-651X; ESSN: 1976-5525


Multinational enterprises undertake Foreign Direct Investments mainly through two different modes: Mergers and Acquisitions and greenfield investments. In the sizable empirical literature that examines the determinants of Foreign Direct Investments, very few studies investigated the determinants of these modes. This article empirically analyzes the extent to which determinants such as market size, exchange rate, and market openness in six selected ASEAN countries (ASEAN-6) influence the choice of one entry mode of Foreign Direct Investments over the other. A robust relationship between market size and exchange rate with greenfield inflows rather than Mergers and Acquisitions sales is found. Additionally, given an increase in market openness, foreign firms prefer Mergers and Acquisitions to greenfield investments. The results also confirm the fire-sale Foreign Direct Investments phenomenon during financial crises.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
DOI Number: https://doi.org/10.11130/jei.2019.34.4.746
Publisher: Center for International Economics/Sejong University
Keywords: Mergers and acquisitions; Greenfield investment; Foreign direct investment; ASEAN
Depositing User: Mohamad Jefri Mohamed Fauzi
Date Deposited: 09 Nov 2021 09:11
Last Modified: 09 Nov 2021 09:11
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.11130/jei.2019.34.4.746
URI: http://psasir.upm.edu.my/id/eprint/81335
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