ABSTRACT
A decision to enter foreign markets via trade as opposed to Foreign Direct Investment (FDI) might also be a reflection of the general paradigms underlying executives’ action. Horizontal FDI tends to dominate in high-tech sectors where protecting the confidentiality of a company’s intellectual property is paramount. International mergers and acquisitions (M&A) constitute a prime example of brownfield FDI. The justification for an international M&A can be a sales-side argument like a new market or a production-side motive like access to resources. International joint ventures are equity arrangements where an MNE and its partner each take a percentage stake in a new company, often built on a greenfield basis. Companies that are hesitant about investing their own equity capital in a foreign venture can choose instead to share intangible assets with a local partner in exchange for the payment of fees and/or royalties.
