The economic policy uncertainty and the choice of entry mode of outward foreign direct investment: Cross-border M&amp;A or Greenfield Investment

Zhou, Kexuan; Kumar, Sanjay; Lan, Yu; Jiang, Xinlin

doi:10.1016/j.asieco.2021.101306

Cited by 28 publications

(14 citation statements)

References 37 publications

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“…As an institutional factor, EPU has significant impacts on the business environment for economic activity. Many papers have confirmed the adverse impacts of EPU on the real economy (Gu et al 2021;Li et al 2020), firm investment (Liu et al 2020;Suh and Yang 2021;Zhou et al 2021), innovation activities (Guan et al 2021;He et al 2020), financial markets (Danisman et al 2020;Phan et al 2021), and energy markets (Xiao and Wang 2021;Zhang and Yan 2020). Based on the close link between economic activity and environmental quality, several authors discuss the potential outcomes of EPU on environmental quality (Jiang et al 2019;Yu et al 2021).…”

Section: Introductionmentioning

confidence: 99%

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, and energy intensity: the case of G7 countries

Chu

2021

Environ Sci Pollut Res

100

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This study explores the environmental impacts of economic policy uncertainty, economic complexity, renewable energy, and energy intensity on the countries in the Group of Seven (G7) countries. To this end, the study employs fully modified ordinary least squares and a fixed effects model with Driscoll and Kraay, Rev Econ Stat 80:549-560, (1998) robust standard errors and a panel dataset from 1997 to 2015. The findings demonstrate a long-term relationship between the variables of interest and carbon dioxide emissions and the ecological footprint. Specifically, high energy intensity increases environmental pollution while high economic policy uncertainty and renewable energy reduces environmental degradation. The environmental Kuznet curve of economic complexity and environmental quality holds for G7 countries. Moreover, economic policy uncertainty strongly moderates the environmental effect of renewable energy, economic complexity, and energy intensity. Specifically, although economic policy uncertainty amplifies the beneficial environmental effects of renewable energy and economic complexity, it enlarges the harmful effect of energy intensity on environmental quality. These empirical outcomes allow us to draw useful implications for policy makers to mitigate the environmental degradation.

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Section: Introductionmentioning

confidence: 99%

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, and energy intensity: the case of G7 countries

Chu

2021

Environ Sci Pollut Res

100

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“…In the extant literature of OFDI and outbound M&A, a lot of authors have identified home and host country macroeconomic factors which motivates or forms a conducive environment for outward cross-border foreign investments from emerging economies like Brazil, Hong Kong, India, China, Malaysia, etc. like Goh (2011) studied the Malaysian economic in this respect, and many more like Bhasin and Garg, 2020;Varma et al, 2015;Reddy, 2015;Zhou et al, 2021;Pantelidis and Kyrkilis, 2003;Deng and Yang, 2015. Some country specific studies with respect to macroeconomic factors for Indian outbound M&A has also been carried out (Das and Banik, 2015;Nunnenkamp et al, 2012, Pradhan, 2011Bhasin et al, 2021).…”

Section: Ofdimentioning

confidence: 99%

FLAGGING DETERMINANTS FOR INDIAN OUTBOUND M&A

Kapil

Dhingra

2021

IJEFI

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Indian enterprises have succeeded in climbing the ladder of outward M&A transactions and out performing everyone's expectations post 1990s. This paper aims to recalibrate the empirical literature of India's outbound M&A by considering the impact of host market size, appreciation in home currency, India's trade openness and liberalization policies. This study attempts to examine the impact of the host market size, home international reserves and trade openness along with home currency appreciation on the volume of the outbound M&A by Indian firms, using augmented autoregressive distributed lag (augmented ARDL) bounds testing approach. Findings reveal that appreciation of Indian rupee and liberal norms towards trade, i.e. import and export both will inevitably benefit or push the Indian firms to acquire foreign firms overseas, in the short term as well as over the long term. This paper makes an effort to identify and describe the significant factors influencing the outbound M&A deals by Indian firms in the recent years, which were previously proved relevant for group of emerging economies at large.

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“…These determinants could be divided into three levels. The first is the country level, such as the market size of the host country ( Al-Kaabi et al, 2010 ), the institutional environment ( Brouthers and Brouthers, 2000 ; Meyer et al, 2009 ; Chen et al, 2017 ), and the economic policy uncertainty ( Sun et al, 2021 ; Zhou et al, 2021 ). The second is the industry level, mainly the influence of industry heterogeneity ( Hennart and Park, 1993 ; Anand and Delios, 2002 ; Larimo, 2003 ).…”

Section: Introductionmentioning

confidence: 99%

Cross-border acquisition or greenfield investment? The role of investor sentiment

Dong

Chen²

2023

Front. Psychol.

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When a firm invests in a foreign market, it has to choose between cross-border acquisition and greenfield investment. The impact of investor sentiment on the establishment mode of firm outward foreign direct investment (OFDI) has not been investigated by previous literature. Based on the data of Chinese listed companies between 2007 and 2019, this paper finds that firms prefer cross-border acquisition over greenfield investment when investor sentiment is high, and equity issuance and catering to sentiment are transmission channels. Cross-sectional test results show that the impact of investor sentiment on the establishment mode is concentrated in non-state-owned enterprises, and is stronger in non-eastern province firms and in technology-intensive OFDI. After various robustness tests, the main conclusion remains unchanged. This paper not only finds a new determinant that affects the establishment mode of OFDI but also enriches the research on the economic consequences of investor sentiment, which helps understand the role of investor sentiment in firms’ internationalization decisions.

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The economic policy uncertainty and the choice of entry mode of outward foreign direct investment: Cross-border M&A or Greenfield Investment

Cited by 28 publications

References 37 publications

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, and energy intensity: the case of G7 countries

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, and energy intensity: the case of G7 countries

FLAGGING DETERMINANTS FOR INDIAN OUTBOUND M&A

Cross-border acquisition or greenfield investment? The role of investor sentiment

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