Cross-border M&A or Greenfield investment: from the perspective of firm heterogeneity




Economics School, Zhongnan University of Economics and Law;Economics School, Zhongnan University of Economics and Law


In recent years China Outward FDI has developed rapidly, especially under the Belt and Road Initiative. In this paper, the Firm Heterogeneity Model of OFDI has been constructed and the Logit model is used to empirically study the heterogeneous factors that affect the enterprises’ decision about OFDI with the data of 1912 investment events of 955 China listed companies from 1993 to 2015. The result shows that the enterprises with relatively low productivity prefer to choose Cross-border M&A to enter the host countries while the enterprises with high productivity prefer Greenfield investments. The enterprises’ choice of cross-border M&A will be significantly affected by corporate ownership, enterprise scale, financial situation and capital intensity. It is more possible for the enterprise to choose cross-border M&A, which has the features of state-owned, larger scale, higher capital intensity and less asset-liability ratio. In addition, the suggestions about OFDI have been provided to Chinese enterprises from the perspective of firm heterogeneity through further studying aspects of enterprise location, industry type, investment motivation and factor intensity.


heterogeneity of enterprise;cross-border M&A;Greenfield investment;enterprise productivity


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Total: 17 articles

  • [1] Han Yan Qian Chunhai(Department of Academics,China’s Executive Leadership Academy,Pudong), On the Sectoral Heterogeneity of Effects of FDI on China's Economic Growth-A Panel Data Study, Nankai Economic Studies,
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