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An acquisition or a greenfield subsidiary?: The impact of knowledge on sequential establishments in a host country
Linnaeus University, School of Business and Economics, Department of Marketing.ORCID iD: 0000-0003-0455-0643
2020 (English)In: International Marketing Review, ISSN 0265-1335, E-ISSN 1758-6763, Vol. 37, no 2, p. 377-396Article in journal (Refereed) Published
Abstract [en]

Purpose Establishment of wholly owned subsidiaries in a foreign market is central to international marketing because sole ownership and high commitment facilitate firm's marketing in the local market. Drawing on knowledge-based theory, this study extends the current understanding of firm's sequential establishments of wholly owned subsidiaries in a host country. Design/methodology/approach Swedish firms' establishments of wholly owned subsidiaries in Germany, the United Kingdom and the United States were analyzed using a longitudinal approach. Findings A firm's broad international experience is associated with an acquisition in any phase, while mode experience and value-adding experience are associated with postinitial acquisitions. There is no association between mode experience and greenfield investments. Research limitations/implications Knowledge-based theory explains a firm's choice of establishment mode when establishing in the same host country. Effects of marketing experiences are due to the establishment mode and different experiences explain choices for initial and postinitial establishments. Practical implications In choosing between a wholly owned subsidiary in terms of an acquisition or a greenfield investment, for a foreign establishment the firm is advised to consider the impact of marketing experiences and establishment phase. Originality/value Research is needed on how experiences affect choices between foreign establishment modes where the firm is the sole owner. This study is the first to focus on the choice between wholly owned subsidiaries in terms of acquisitions and greenfield investments, and the impact of experience and phase of establishment in a particular host country.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2020. Vol. 37, no 2, p. 377-396
Keywords [en]
Subsidiary, Acquisition, Greenfield, Experience, Phase, Sequential
National Category
Business Administration
Research subject
Economy, Marketing
Identifiers
URN: urn:nbn:se:lnu:diva-95410DOI: 10.1108/IMR-12-2018-0345ISI: 000531840100001Scopus ID: 2-s2.0-85084462454OAI: oai:DiVA.org:lnu-95410DiVA, id: diva2:1434591
Available from: 2020-06-03 Created: 2020-06-03 Last updated: 2021-05-07Bibliographically approved

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Pehrsson, Anders

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CiteExportLink to record
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Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
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  • Other style
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Language
  • de-DE
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Output format
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  • asciidoc
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