Why Do Firms Choose Acquisition
Versus Greenfield Investments?
Most cross-border investment is in the form of mergers and acquisitions rather than greenfield investments
Firms prefer to acquire existing assets because
mergers and acquisitions are quicker to execute than greenfield investments
it is easier and perhaps less risky for a firm to acquire desired assets than build them from the ground up
firms believe that they can increase the efficiency of an acquired unit by transferring capital, technology, or management skills