![]() ![]() The analysis indicates a strong relationship between the diversification choice and the entry mode decision. The model is tested using a data set of FDI into the United Kingdom by MNEs in engineering and related industries. This paper introduces a more realistic selection model, in which the diversification choice and the entry mode choice are made sequentially, and are therefore related. The international business literature has generally treated these strategic choices as independent. It must also decide whether to enter into a foreign market through a greenfield or acquisition strategy. The MNE must decide whether to diversify or to concentrate on its main line of business (LOB). Multinational enterprises (MNEs) consider many factors when making decisions in the context of foreign direct investment (FDI).
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