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In this chapter, we aim to shed more light on the role of formal institutional distance in firms’ foreign entry mode choices by accounting for the direction of that distance. Specifically, we distinguish between foreign entries where the host country is institutionally less developed than the investing firm’s home country (negative institutional distance) and those where the host country’s institutions are comparatively more developed (positive institutional distance), and explore whether these different types of entries are implemented through different equity-based modes. We take an information economics perspective to develop hypotheses on the effects of positive and negative formal institutional distance on firms’ choices between greenfields and acquisitions, and between full and partial ownership of greenfield and acquired subsidiaries. We test our hypotheses on a sample of 1,070 foreign entries made by 796 emerging market multinationals originating from 14 countries. Controlling for the host country’s formal institutional quality and other factors, we find that negative institutional distance increases the likelihood that a foreign entry takes the form of a greenfield investment rather than an acquisition and that positive institutional distance decreases that likelihood. We also find that negative institutional distance increases the chances that firms choose greenfield joint ventures over wholly owned greenfields and full over partial acquisitions. Finally, we find that positive institutional distance does not affect firms’ ownership stake choices, neither for greenfields nor for acquisitions. Overall, these findings argue for a nuanced, contingency view of the role of formal institutional distance in foreign entry mode choices. To the best of our knowledge, this study is the first to use information economics to construct a holistic picture of firms’ equity-based entry mode choices, taking into account both establishment and ownership modes.

This paper identifies the motivations for small- and medium-sized enterprises (SMEs) when they undertake greenfield foreign direct investment (FDI) into an emerging market. It elucidates the factors that influence SMEs to choose a fully equity-based investment despite the significant risks and commitments involved with greenfield FDI.

This exploratory study uses case study research based on interviews conducted with managers and founders of 16 German SMEs that have established greenfield operations in Malaysia.

Building upon the transaction cost theory, five major motivations are identified that drive greenfield choice among the SMEs. The results imply that SME motivation for greenfield is derived from a combination of strategic asset-seeking determinants and culturally driven reactions to external and behavioral uncertainty. The results also ascertain that these motivations have less to do with the size and revenue of the firm, but hinge on the SMEs’ inner antecedents such as asset specificity, international experience, proprietary knowledge and ownership mode.

The findings clarify the literature on equity-based entry mode for SMEs in emerging economies, enabling a closer understanding of the organizational and dynamic experiences and an overview of the auxiliary competencies these companies have to compete in the global market. The conceptual insights and empirical evidence derived from this study contribute to the intellectual discourse and managerial implications in the field of internationalization strategies of SMEs, particularly from developed countries into emerging markets via greenfield FDI.

The paper examines the impact of foreign direct investment (FDI), either greenfield investment or cross-border mergers and acquisitions (M&As), on domestic entrepreneurship.

This paper uses a panel dataset of 104 countries over ten years from 2006 to 2015 and multiple econometric techniques to control for potential endogeneity bias.

FDI, both in the form of greenfield investment and cross-border M&As, exerts positive spillover that encourages domestic entrepreneurial activities. While the benefit of greenfield investment in entrepreneurship is more pronounced in countries with higher levels of market capacity and institutional support, that of cross-border M&As is not influenced by these factors. On the other hand, human capital is important in promoting the positive effects of both types of FDI, and unless the level of human capital in the host economies reaches a certain threshold, greenfield investment can adversely affect domestic entrepreneurship.

Policies toward FDI need to focus on promoting the driving forces behind FDI spillover to counteract the potential negative crowding-out effect of FDI.

The paper contributes to the existing literature investigating the impact of FDI on domestic entrepreneurship by distinguishing between the two FDI modes of entry and taking into account the moderating effects of sociopolitical characteristics of the host economies.

Greenfields are new plants – typically, but not exclusively manufacturing – that belong to an existing organization. They are ideal settings for teams, but implementation of the technology and people systems during start‐up can be difficult. This review aims briefly to describe the origin of the greenfield concept, three decades of research, and recommendations for work practices that promote teams.

A total of 37 research studies evaluating greenfield operations were located, including quasi‐experiments, surveys and case studies. A brief description of the study is provided, as well as information regarding productivity and employee attitudinal and behavioral outcomes.

The paper finds that greenfields are frequently used to implement team‐based systems, with varying results. Outcomes such as productivity, quality, employee satisfaction, absenteeism and turnover are described. Research evaluating greenfields is limited due to proprietary and competitive concerns and the reluctance to discuss failures. Three broad areas in which greenfields are unique are identified and discussed in the interest of promoting future research; these include employee attitudes and behaviors, organizational culture and human resource practices.

A total of 24 human resource practices that support team‐based work systems in new greenfield plants are recommended and described.

This paper fills a void in the team literature by reviewing greenfield facilities as distinctive organizations for team‐based systems.

Reviews the concept of a “greenfield site” within human resource management (HRM) and shows that the ways in which distance is conceptualised or measured in describing greenfield sites needs to be made explicit. This is particularly important when comparing different studies and in attempting generalisations about the introduction of new HRM practices on greenfield sites. The distance factors which may impose a constraint on the introduction of new HRM practices at a greenfield site are the site’s distance from a firm’s existing operations, its distance from geographical concentrations of similar economic activities and its distance from regions with traditional patterns of management‐employee relations. Concludes by arguing that it is inappropriate to treat the greenfield factor as a dichotomous variable and that there are various shades of green.

The purpose of this paper is to argue that comparative advantage of host country’s industry can be one of the significant determinants of the decision on mergers and acquisitions (M&A) or greenfield in foreign direct investment (FDI).

The authors extract five-related properties of an industry with comparative advantage in a host nation from Bernard et al.’s (2007) international trade model with heterogeneous firms and attempt to empirically test their roles in a multinational enterprise’s (MNE) M&A or greenfield investment decision, using the inward FDI data set in Korea from 1999 to 2006.

The theoretical framework finds that the five properties derived from an industry with comparative advantage in a host country have mixed motives for M&A or greenfield. The empirical results show that selected conventional independent variables generally affect the M&A or greenfield entry mode decision with significance individually and that their impacts become more or less prominent when the authors employ interaction terms combining them with comparative advantages in the industries.

This implies that MNEs not only consider their own firm-specific advantages or other country-level factors for foreign market entries as the previous research generally found, but also seriously take into account industry-specific factors, especially industry-wide comparative advantages based on heterogeneous productivities of firms.

This paper reconciles multinationals’ strategic motives under an oligopolistic market with their efficiency gains under a monopolistic competitive market, which are considered as two main factors for cross-border M&A. Furthermore, this paper adds a new firm-level data set into entry mode research.

The establishment of new plants in greenfield sites is a strategic organisational initiative providing the opportunity to develop alternative systems of staff values and beliefs which may be more appropriate for capitalising on external product market opportunities. Explores whether an alternative organisational culture can be established at a greenfield site within a New Zealand food processing plant. This case organisation utilised the provisions of the Employment Contracts Act 1991 to establish alternative employment conditions in the greenfield site to those of its brownfield site. A comparative analysis was made utilising quantitative organisational culture data from Human Synergistic’s Organisation Culture Inventory. The data reveal the similarities and differences between the greenfield and brownfield sites and provide the basis for discussion of whether culture can be managed through the mechanism of a greenfield site. Critical elements in creating a desired culture are identified.

Focuses on recent empirical evidence on management approaches to industrial relations in greenfield companies in Ireland. Places particular emphasis on the impact of industrial relations on the location of greenfield site facilities, patterns of trade union recognition and avoidance, pay determination, and the role of employer associations. Finds that, despite a national system of “bargained consensus” and the integration of trade unions into corporatist decision‐making structures on economic and social issues, most recent greenfield site facilities are non‐union. Argues that this evidence points to extensive management opposition to conventional pluralist industrial relations, despite the existence of a State system which has consistently promoted a consensus approach over the past two decades. This apparent paradox is explained by reference to the transformation in the structure and performance of the Irish economy in parallel with related social changes since the early 1980s.

The recruitment of young, “green” workers has long been recognised as a defining characteristic of the greenfield site. Extends understanding of how person‐centred recruitment, with its emphasis on employee acceptability, disadvantages the older greenfield applicant. Whether it be a new high commitment or customer service site, worker age is shown to combine with the conventional recruitment criteria of skill, class and gender to constitute an excluded labour segment. In its superior capacity to shape workforce composition, greenfield person‐centred recruitment is shown to be important to understanding the ways in which managerial control is pursued and exercised more widely than within the labour process. Leopold and Hallier’s framework of greenfield types is also modified to encompass new customer service sites where acceptability recruitment is critical to greenfield employers’ labour relations strategies. Concludes that person‐centred recruitment should be studied as a critical feature of greenfield workplace politics and practices.

Greenfields are new plants, typically but not exclusively manufacturing, that belong to an existing organization; as such, they offer an organizational strategy for understanding knowledge transfer. Greenfields are important to understand because they offer advantages for expansion into new economic and labor markets. But the overall challenges starting up a new greenfield cannot be overlooked. The aim of this paper is to try to better understand how knowledge transfer occurs in these interesting team operations.

Plant and human resource managers representing 33 greenfield organizations from food and beverage, consumer products, heavy manufacturing, pharmaceutical and automotive industries were contacted. Managers discuss greenfield rationale, vision, work practices, and business characteristics. Both opportunities and risks are described, along with examples from the research literature.

Greenfields can be successful as experiments in knowledge transfer but are unlikely by themselves to create large‐scale organizational change. Greenfields offer long‐term potential if team work practices and culture can be sustained and ultimately transferred to other parts of the organization, but this requires strong senior management support.

Opportunities and risks involved in greenfield start‐ups are discussed, along with practical examples from managers from diverse industries.

This paper helps to fill the gap between greenfield promise and reality.