Spanish company foreign market entry

• Autores: Felipe Ruiz López, Francisco Mas Ruiz
• Localización: Working papers = Documentos de trabajo: Serie EC - (Instituto Valenciano de Investigaciones Económicas), Nº. 10, 2003, 41 págs.
• Idioma: inglés
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• Resumen

  • The aim of this paper is to analyse the determinants of diversification mode (acquisition versus greenfield) through foreign direct investment considering various theories, such as those of mergers and acquisitions, transaction costs, the learning organisation, the institutional context of the company and the cultural environment of the host country, and to analyse the determinants of entry mode combining diversification mode with ownership structure decision (greenfield wholly-owned subsidiaries, greenfield joint ventures, full acquisition and partial acquisition) and proposing various research hypotheses. The methodology used estimates various binomial and multinomial logit models, over a sample of 141 Spanish manufacturing companies between 1998 and 2000, finding that entry mode into a foreign country through direct investment is mainly explained by related diversification, international and local experience, advertising intensity, cultural distance, company size and ownership structure.