R&D Spillovers and Foreign Market Entry: Acquisition versus Greenfield Investment

Kazuhiko Yokota*, Kung Ming Chen


研究成果: Article査読

2 被引用数 (Scopus)


This paper presents a three-stage game to model the entry behavior of a multinational firm in the presence of R&D spillovers. The multinational firm's entry mode choice - that is, to invest to set up a new plant or merge with a local firm - is a function of the magnitude of spillovers, as well as the relative cost of greenfield investment, and mergers and acquisitions (M&A). Our model shows that if there exist relatively high R&D leakages and relatively small difference in cost between M&A and greenfield investment, an R&D-intensive foreign firm tends to choose greenfield investment rather than M&A, while if there exist relatively low R&D leakages, the foreign firm is more likely to choose M&A rather than greenfield investment. It is also shown that the size of social welfare of the host country depends on the degree of R&D spillovers. These results produce strong implications for antitrust policy for particularly developing countries.

ジャーナルInternational Economic Journal
出版ステータスPublished - 2012 6月 1

ASJC Scopus subject areas

  • 経済学、計量経済学および金融学(全般)


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