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| Author: | Brouthers, K. D. Dikova, D. |
| Title: | Acquisitions and real options: the greenfield alternative |
| Journal: | Journal of Management Studies
2010 : SEP, VOL. 47:6 p. 1048-1071 |
| Index terms: | options consolidation mergers emerging markets Eastern Europe |
| Language: | eng |
| Abstract: | Using real options theory, it is proposed that greenfield start-up ventures provide a real option alternative to acquisitions for companies founding new international subsidiary units. To test this, a sample of Western European companies entering the emerging economies of Eastern Europe are investigated. The findings propose that acquisitions are a good choice only when companies enter markets with low demand uncertainty and when these companies have acquisition-based strategic flexibility. Overall, the analysis shows that greenfield ventures seem to provide companies with a real option when making the acquisition decision. |
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