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Foreign Direct Investment Entry Modes, Development and Technological Spillovers

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  • Isabel Alvarez
  • Raquel Marin
  • Francisco J. Santos-Arteaga

Abstract

type="main"> This paper illustrates how wholly owned entry modes of multinational companies (MNCs) are jointly determined by both the strategic objectives of the MNC and the local firms' assets in the creation of value. In particular, the entry mode chosen is based on the potential reciprocal technological spillovers between local firms and MNC subsidiaries. M&As are preferred when host countries exhibit a certain level of development in their local systems of innovation, especially for technologically leading MNCs. Otherwise, for technological laggard MNCs, greenfield investments prevail and M&As may be carried out for meeting demand motives in developing local systems of innovation.

Suggested Citation

  • Isabel Alvarez & Raquel Marin & Francisco J. Santos-Arteaga, 2015. "Foreign Direct Investment Entry Modes, Development and Technological Spillovers," Manchester School, University of Manchester, vol. 83(5), pages 568-603, September.
    • Handle: RePEc:bla:manchs:v:83:y:2015:i:5:p:568-603
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    References listed on IDEAS

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