Foreign direct investment motivations and knowledge acquisition from MNEs in overseas subsidiaries

Despite studies exploring factors affecting knowledge acquisition from multinational enterprises in subsidiaries, what accounts for a successful acquisition is unresolved. We argue that such disparity may stem from inattention to investment motivations of multinational enterprises (MNEs) in foreign markets and to the fact that learning patterns of subsidiaries can be influenced by foreign firms' market‐seeking or efficiency‐seeking behaviors. We find that absorptive capacity in learning organizations and daily interactions with knowledge possessors are essential to learning from parent firms. In addition, active support from parent firms is particularly crucial for subsidiaries seeking to improve operational efficiency of MNEs. We also suggest that potential absorptive capacity plays a catalyst role in initiating knowledge acquisition, particularly in cases where MNEs have market‐seeking motivations. Copyright © 2014 ASAC. Published by John Wiley & Sons, Ltd.     

Impacts of International Greenfield Investment on Firm Valuation

Our study examines the announcement effects of 343 international greenfield investments by 289 U.S. firms for their impact on shareholder wealth. This paper develops five hypotheses based on the positive‐multinational‐network hypothesis. The evidence indicates that market reactions to announcements by firms entering developing countries are more favorable than those entering developed countries. In addition, the results show that the wealth effect for firms entering a host country for the first time is greater than for those that are already operating within the country. As for the long run, greenfield firms have shown improvement in their operating performance and stock performance. Copyright © 2012 ASAC. Published by John Wiley & Sons, Ltd.