Mergers & Acquisitions vs. Greenfield Investments: Research on the Applicability Boundaries of Corporate Mergers and New Construction Investments

Author: Chen Yunhua
Publisher:
Publish Date: 2007-02-01
Features: The growth of a company is achieved through two pathways: internal growth and external growth. New ventures and mergers & acquisitions (M&A) are both the most representative methods of these pathways and also the most common types of investment decisions. M&A vs. New Ventures applies theories such as the Resource-Based Theory, the Monopolistic Advantage Theory in international investment theory, the Life Cycle Theory, and the Eclectic Theory of International Production to systematically study the mechanisms influencing the choice between M&A and new ventures. It also pioneers an analysis of eight significant factors correlated with corporate investment methods: market growth rate, market competition, company size, strategic resources, business experience, management level, cultural differences, and corporate strategy types. This reveals the general patterns of M&A and new venture investment activities, establishes a mathematical model for studying corporate M&A and new venture investments, and provides certain guidance for corporate M&A and new venture investment decisions.