The effect of local firm's specific assets on the choice between greenfield and acquisition: family firms and cluster knowledge

Using a sample of 357 foreign entries made by firms from 31 different countries in Italy, over a ten-year period (2005-2015), we investigated how the local firm’s specific assets affect the choice between greenfield and acquisition. Specifically, we focused our analysis on the choice between greenfield joint venture and partial acquisition and how assets promoted by family ownership and by the location in an industrial cluster affect this choice. Results show that MNEs entering a foreign country with a local family partner or with a local partner located in an industrial cluster are more likely to choose a partial acquisition rather than a greenfield joint venture.