Greenfield for Manufacturing, M&A for Services: Sector-Specific FDI Growth Paths

Jiahao Hou

doi:10.54254/2754-1169/2025.CAU26688

Advances in Economics, Management and Political SciencesOpen access

Greenfield for Manufacturing, M&A for Services: Sector-Specific FDI Growth Paths

Research Article

Open Access

Greenfield for Manufacturing, M&A for Services: Sector-Specific FDI Growth Paths

Jiahao Hou ^1*

¹ University of California

^*Corresponding author: jhou12@uci.edu

Published on 9 September 2025

AEMPS Vol.214

ISSN (Print): 2754-1177

ISSN (Online): 2754-1169

ISBN (Print): 978-1-80590-353-6

ISBN (Online): 978-1-80590-354-3

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Abstract

This study examines the distinct impacts of greenfield investment and cross-border mergers and acquisitions (M&A) on host countries’ economic growth through case-study approach. Focusing on sectoral differences, it finds that greenfield investment is more effective in manufacturing industries, where it drives capital formation, employment, and technology transfer. In contrast, cross-border M&A better supports service-sector growth by transferring managerial expertise, organizational knowledge, and access to international networks. The case studies also reveal regional patterns: Southeast Asian countries depend heavily on greenfield manufacturing investments, whereas Latin American economies increasingly rely on M&A-service synergies. These findings suggest that FDI strategies should be tailored to national priorities—developing economies focusing on industrialization should attract greenfield investment, while service-oriented and advanced economies should adopt regulatory frameworks to maximize knowledge-intensive M&A benefits.

Keywords:

FDI, Greenfield Investment, Cross-border Mergers and Acquisitions, Sectoral Economic Growth

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References

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References

[2]. Dang, L., & Merino, F. (2024). FDI impact: catalyzing digital capabilities in host nations. International Journal of Development Issues, 23(2), 325-347.

[5]. Riddiough, S., & Zhang, H. (2022). Cross-border M&A flows, economic growth, and foreign exchange rates. Working Paper, Bank for International Settlements.

[8]. Görg, H., & Greenaway, D. (2004). Much ado about nothing? Do domestic firms really benefit from foreign direct investment? The World Bank Research Observer, 19(2), 171–197.

Cite this article

Hou,J. (2025). Greenfield for Manufacturing, M&A for Services: Sector-Specific FDI Growth Paths. Advances in Economics, Management and Political Sciences,214,16-21.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICEMGD 2025 Symposium: Resilient Business Strategies in Global Markets

ISBN: 978-1-80590-353-6(Print) / 978-1-80590-354-3(Online)

Editor: Florian Marcel Nuţă Nuţă, Li Chai

Conference website: https://2025.icemgd.org/CAU.html

Conference date: 20 September 2025

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.214

ISSN: 2754-1169(Print) / 2754-1177(Online)

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