Research Title:
Greenfield Investment vs. Cross-border M&A: A Visualized Analysis of Their Heterogeneous Effects on Economic Growth
OFDI
Abstract (150-180 words)
- Core Question: Compare the contributions of greenfield investment and cross-border M&A to host countries’ economic growth.
- Methodology: Panel fixed-effects model + heterogeneity visualization (heatmaps/grouped bar charts).
- Findings: Greenfield investment significantly promotes GDP growth (especially in manufacturing), while M&A is more effective for service sector growth, with technology transfer as the core mechanism.
- Policy Implications: Developing countries should adopt differentiated strategies to attract FDI.
I. Introduction (450 words)
1.1 Background
- Context: Definitions of greenfield investment and M&A, and the evolution of their proportions in global FDI (2000–2022).
- Core Questions:
- How do the two FDI forms affect growth through different channels (e.g., job creation/technology spillovers)?
- Do industry and country heterogeneities exist?
1.2 Literature Review
- Greenfield investment has stronger technology spillovers (Harding & Javorcik, 2011).
- M&A improves service sector efficiency (Ashraf et al., 2023).
- Research gap.
1.3 Objectives and Research Design
- Panel regression + visualization (by industry/region/income level).
II. Theoretical Framework and Hypotheses (400 words)
2.1 Mechanisms
- Greenfield Investment:
- New production capacity → Job creation ↑
- Technology transfer → Management efficiency ↑
- Market concentration ↑
- Cross-border M&A:
- Resource integration → GDP growth
2.2 Hypotheses
- H1: Greenfield investment has a stronger positive effect on manufacturing GDP growth than M&A.
- H2: Cross-border M&A is more effective in boosting service sector GDP growth.
- H3: Low-income countries benefit more from greenfield investment.
III. Data and Methodology (700 words)
3.1 Data SourcesVariableIndicatorDatabaseDependentIndustry GDP growth rateUNIDO Industrial Statistics (Manufacturing)Core IndependentGreenfield investment amountUNCTAD FDI Greenfield DatabaseCross-border M&A amountUNCTAD FDI M&A DatabaseControlHuman capital, infrastructureWorld Bank WDI3.2 Econometric Model (Two-way Fixed Effects)
- Model:
where ii = industry, jj = country, tt = time. - Sample: Countries × 15 years (2008–2022).
- Subgroup Analysis: By industry (manufacturing/services) and income level.
3.3 Visualization Tools
- Heatmap: Correlation between greenfield investment and GDP growth across countries (colored by industry).
- Grouped Bar Chart: Comparison of coefficients for greenfield investment and M&A.
- Reference: https://r-graph-gallery.com/
IV. Empirical Results and Visualized Analysis (900 words)
4.1 Baseline Regression Results
- Table 1: Full-sample regression.
- Economic Significance: E.g., a 1% increase in greenfield investment raises manufacturing GDP growth by 0.12 percentage points.
4.2 Heterogeneity Visualization
- Figure 1 (Heatmap):
- Strong correlation between greenfield investment and manufacturing growth (e.g., Vietnam, Mexico).
- Strong correlation between M&A and service sector growth (e.g., India, Brazil).
- Figure 2 (Grouped Bar Chart):
- Manufacturing vs. service sector comparisons.
4.3 Case Studies
- Vietnam Electronics: Samsung’s greenfield investment upgraded local supply chains.
- Brazilian Finance Sector: Foreign M&A improved banking efficiency.
V. Conclusion and Policy Recommendations (350 words)
5.1 Key Findings
- Greenfield investment drives manufacturing growth, while M&A optimizes service sector efficiency (supporting H1–H2).
- Low-income countries benefit more from greenfield investment (supporting H3).
5.2 Policy Implications
- Manufacturing-oriented countries (e.g., Southeast Asia) should streamline approval processes for greenfield investment.
- Service-developed economies (e.g., Latin America) need stricter antitrust reviews for M&A.
5.3 Limitations
- Failure to quantify FDI technology spillovers; future research could incorporate firm-level patent data.