Comparative Analysis On MNE's Entrance Into Oversea Market: Greenfield Vs. Cross-Boarder Merger & Acquisition

In MNE(Multinational Enterprise)'s FDI(Foreign Direct Investment), two main investmend methods can be used: Greenfield and M&A(Cross-Boarder Merger & Acquisition). As for MNE, which investment method is better is the most important thing. At this point, maximal profit seeking is the basic principle. However, as for the host country, which method is better is also an important thing. And at this point, host country must think of the welfare of host economy. This paper will focus on the comparison of Greenfield and M&A. Thus, the structure of thia paper is as below:The Preface will describe the motive of this paper and the topic.Chapter One will introduce FDI and the trendency of FDI in the future. At the same time, we will introduce some representational papers which studied on this topic. These papers mainly analysised the difference of Greenfield and M&A. At the end of this chapter, we will outline the main content of this paper.Chapter Two will emphasis on MNE's profit analysis at different investment method. On the basis of a simple model, the investment profit will be compared in three different market structure: complete competition market, monopoly market and oligarch market. We will also compare the difference of host economy welfare in three different market.Chapter three will emphasis on the cost of MNE's investing oversea. And we will introduce a new view that enterprise is a collection of some kinds of resource. On this basis, we will analysis the resource advantage of MNE, host country's enterprise and open market. Here we think the cost of resource as the most important factor.Chapter Four will analysis the different influence on the host economy caused by different investment mode. We will dicuss the influence on finance, technology progress, imployment, export & import and market structure in host economy.The last is the conclusion of this paper.