Factors affecting perceptions of the choice betwee

Authors: Mehmet Demirbag Ekrem Tatoglu Keith W Glaister

Publish Date: 2008/02/01

Volume: 48, Issue: 1, Pages: 5-38

PDF Link

Abstract

This study provides a comprehensive account of foreign establishment mode strategies of firms investing in Turkey The results of the logistic regression modeling provide support to the hypothesized relationships that take into account the impact of host country specific motives of MNEs on their choice between acquisitions and greenfield investmentsOur results also show that the main investing firm specific and subsidiary level determinants of FDI modal choice identified in prior research also influence the establishment mode choice of Western MNEs when investing in Turkey Parent diversity previous commercial association ownership pattern and resourceintensiveness of the target industry have the expected impact on the foreign investor’s choice between a greenfield investment and an acquisitionNo support is found however for the impact of cultural distance and foreign parent size on establishment mode choice Similarly the control variables of home region of the investing firm timing of entry and industrial sector of investment do not affect modal choice

Keywords: