Greenfield investments, cross-border M&As, and economic growth in emerging countries
DOI:
https://doi.org/10.17811/ebl.5.3.2016.87-94Abstract
This paper investigates the effect of foreign direct investment (FDI) on economic growth in emerging countries through its two major entry modes: Greenfield investments and cross-border mergers and acquisitions (M&As). We found that both Greenfields and M&As contribute positively to accelerating growth. In addition, emerging countries could obtain more benefits from Greenfields and M&As if the human capital levels were enhanced. We also found that while growth did not have any significant impact on Greenfield investment levels, lower economic growth could lead to higher M&A flows.
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