FDI entry strategies and the impacts of economic freedom distance: Evidence from Nordic FDIs in transitional periphery of CIS and SEE

Ahmad Arslan, Shlomo Y. Tarba and Jorma Larimo

International Business Review, 2015, vol. 24, issue 6, 997-1008

Abstract: This paper addresses foreign direct investment (FDI) entry strategies of multinational enterprises (MNEs) by analysing both establishment mode (greenfield investment vs. acquisition) and ownership mode (wholly owned subsidiary vs. joint venture) strategies together. It contributes to extant IB literature by being one of the first to specifically address influences of economic freedom distance on both FDI establishment and ownership mode strategies of MNEs. The novel empirical sample consisting of 348 FDIs made by 146 Nordic (Denmark, Finland, Norway and Sweden) MNEs in the less researched transitional periphery of the European Union (EU), i.e. Common Wealth of Independent States (CIS) and South-Eastern Europe (SEE), during 1990–2009 further enhances the contribution of our study. The study results revealed that high economic freedom distance leads to preference of greenfield investments and JVs by Nordic MNEs in the full sample. Further in depth analysis by dividing the sample into FDIs in the Russian Federation vs. other host economies lead to more interesting insights into the establishment and ownership mode strategies of Nordic MNEs.

Keywords: CIS; Economic freedom distance; Establishment mode strategy; Ownership mode strategy; SEE; Transitional periphery (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0969593115000402
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:24:y:2015:i:6:p:997-1008

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic
http://www.elsevier. ... me/133/bibliographic

DOI: 10.1016/j.ibusrev.2015.03.004

Access Statistics for this article

International Business Review is currently edited by P. Ghauri

More articles in International Business Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().