Mergers & Acquisitions vs. Greenfield Investment: 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 construction 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 Construction applies resource-based theory, the theory of monopolistic advantage in international investment theory, life cycle theory, and the theory of international production theory to systematically study the mechanisms influencing the choice between M&A and new construction investments. It also pioneers the analysis of eight significant factors correlated with corporate investment methods: market growth rate, market competition level, company size, strategic resources, business experience, management level, cultural differences, and corporate strategy types. Thus, it reveals the general patterns of M&A and new construction investment activities, establishes a mathematical model for studying corporate M&A and new construction investments, and provides certain guidance value for corporate M&A and new construction investment decisions.