Milliou, Chrysovalantou; Pavlou, Apostolis - CESifo - 2014
We study a multinational enterprise’s (MNE) choice of foreign direct investment (FDI) mode in a vertically related … unobservability of contract terms favor cross-border acquisition relative to greenfield investment. We also show that while a cross …-border acquisition reduces welfare, greenfield investment can be welfare-improving. These results suggest that policy should distinguish …