Reconsidering the Choice between Takeover and Greenfield Operations

22 Pages Posted: 1 Jan 2022

See all articles by Thomas Andersson

Thomas Andersson

Jonkoping University

Niklas Arvidsson

Lund University

Roger Svensson

Research Institute of Industrial Economics (IFN)

Date Written: September 14, 1992


This paper examines the distribution of greenfield operations vis-a-vis takeover as mode of entry for Swedish multinational finns between 1965 and 1990. The traditional view that takeovers are less risky than greenfield operations but have a lower expected rate of return, is here replaced by the perspective that different entry modes require different skills. An estimation based on the logit model finds that relatively more organizational skill, as captured by company size, number of affiliates and diversification, favours takeover. On the other hand, relatively more technological skill, reflected in R&D intensity, favours greenfield operations.

Keywords: Entry mode, takeover, acquisition, greenfield, establishment, FDI, multinationals, host country

JEL Classification: F23, O33

Suggested Citation

Andersson, Thomas and Arvidsson, Niklas and Svensson, Roger, Reconsidering the Choice between Takeover and Greenfield Operations (September 14, 1992). IFN Working Paper No. 342, Available at SSRN: or

Thomas Andersson

Jonkoping University ( email )

SE-551 11 Jonkoping

Niklas Arvidsson

Lund University ( email )

Box 117
Lund, SC Skane S221 00

Roger Svensson (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
+46-8-6654549 (Phone)
+46-8-6654599 (Fax)


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