Industrial restructuring and oligopolistic competition in a small open economy via cross-border acquisition: the case of Greece

In recent years, cross-border acquisitions have been placed in the centre of the present research agenda on Transnational Corporations (TNCs). In this context an important issue is the comparison between cross-border acquisitions and Greenfield investments. Another issue is the comparison between cross-border and domestic acquisitions. The evidence on the effects of these investment modes on industrial restructuring and competition is scarce and less than conclusive. The present study is designed to provide additional information for the case of a small open economy, using two logit regression models. The focus is on Greece and draws on both Industrial Organisation (IO) and oligopolistic Foreign Direct Investment (FDI) theory. The results indicate that the different investment forms do have multidimensional structural repercussions, which create multiple entrepreneurial gaps within the national industry. These results have important implications for industrial and competition policy.