Library Header Image
LSE Research Online LSE Library Services

The geography of acquisitions and greenfield investments: firm heterogeneity and regional institutional conditions

Amendolagine, Vito, Crescenzi, Riccardo ORCID: 0000-0003-0465-9796 and Rabellotti, Roberta (2024) The geography of acquisitions and greenfield investments: firm heterogeneity and regional institutional conditions. Journal of Regional Science. ISSN 0022-4146

[img] Text (The geography of acquisitions and greenfield investments) - Published Version
Available under License Creative Commons Attribution.

Download (3MB)

Identification Number: 10.1111/jors.12705


This paper investigates how institutional conditions at national and regional levels shape the decisions of Multinational Enterprises (MNEs) to invest abroad by means of either acquisitions or greenfield investments. The empirical analysis covers all Foreign Direct Investment (FDI) projects in the European Union by the largest MNEs in the world to study alternative choices by the same firm and account for firm-level characteristics in investment decisions. The empirical results show that - other things being equal - regions with stronger investment eco-systems are more likely to attract acquisitions, while greenfield investments are more likely in regions with comparatively weaker systemic conditions. Howerver, the regional quality of institutions makes a fundamental difference to the nature of the investment projects attracted by regions: those with high quality of government can attract greenfield investments undertaken by the most productive MNEs. By improving their quality of government, local and regional policy makers can attract higher quality greenfield investment projects to their constituencies, potentially breaking the vicious circle between low productivity areas and low productivity FDI.

Item Type: Article
Official URL:
Additional Information: © 2024 The Author(s)
Divisions: Geography & Environment
Subjects: G Geography. Anthropology. Recreation > G Geography (General)
JEL classification: R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R58 - Regional Development Policy
F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
Date Deposited: 18 Apr 2024 14:45
Last Modified: 18 Jun 2024 21:48

Actions (login required)

View Item View Item


Downloads per month over past year

View more statistics