New Ventures of Acquisitions. The Choice of Swedish Multinational Enterprises.

Abstract

This study examines the factors influencing the multinational enterprises' choice between the takeover of already existing firms and investment in new ventures as a means of entering a foreign market. The results suggest that the degree of industrial diversification of the parent company and the host country's per capita income seems to have a positive influence on the propensity for takeovers. This propensity appears to be negatively related to the rate of growth of industrial production in the industry entered. Further, the author finds that the more recent the entry into a foreign market, the greater the probability for choosing acquisition. Copyright 1990 by Blackwell Publishing Ltd.