IDEAS home Printed from
   My bibliography  Save this article

Foreign Ownership and Market Entry


  • Kjetil Bjorvatn


When a firm wishes to sell in a foreign market, it can do so either by exporting to that market or by investing in a local production unit. The latter mode of servicing a foreign market is referred to as a foreign direct investment (FDI). International production has increased rapidly during the last two decades, and particularly since the second half of the 1980s. This paper describes the facts, explains why firms choose FDI, and evaluates FDI in terms of impact on host economies. Particular emphasis is placed on firms’ choice between the two types of foreign investment; “greenfields”, which involves the establishment of a new production facility, and cross-border mergers and acquisitions, which involves taking over an existing production unit in a foreign market. The paper also contains a fairly extensive discussion of the consequences of economic integration on market entry.

Suggested Citation

  • Kjetil Bjorvatn, 2001. "Foreign Ownership and Market Entry," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 27, pages 13-32.
  • Handle: RePEc:noj:journl:v:27:y:2001:p:13-32

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:noj:journl:v:27:y:2001:p:13-32. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Halvor Mehlum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.