Entry through acquisition: Determinants of multinational firm choices

This paper examines the factors that determine the decision of multinational firms to enter a foreign market through acquisition. In addition to the traditional industry variables attracting or discouraging entry through their effects on expected returns, the relative size of multinational entry in Greece in 1987-96 is found to be affected by a new group of variables, shaping rational profit expectations and characterizing the target, the industry and the origin of the buyer. A better understanding of the decision to enter a market through acquisition instead of greenfield investment and of its possible consequences is thus provided.