A comparative study of foreign investment decisions by small and medium-sized British and German manufacturing companies.
'!he subject of this stuiy is the small am nalium-sized IlI.ll.tinational
manufacturirg ent:ezprise. It examines am c:::cup:rres the nDtives am
process of direct investment in foreign manufacturirg facilities of a
sample of sixty-two British am GentIan c:x:upmies. A cx:.ITprehensive
approach to the analysis has been chosen which, because of the nature
of smaller c:x:upmies facilitates urDerst:an:iin:.
'!he study falls into three broad parts. In part one (sections 1-5),
theories of international trade am theories of the finn are examined
for the contribution they make to an urDerst:an:iin: of direct
investment am inferences are drawn for the researc:::h stratay. Part
two (section 6), c:::cup:rres the structure of nDtives of the sample
c:x:upmies am the degree of their fulfilment. In the final part
(section7), the process of settirg up manufacturirg subsidiaries is
examined in the light of a three-P'lase framework of decision, start-up
am managin] stages. Wherever awropriate or possible, reference is
made to existin] empirical evidence.
'!he conclusion is reached that direct investment by smaller c:x:upmies
is increasirxJ in seep! am pace. Market mtives predaninate in all
cases. British c:x:upmies invest in search of J'leiI markets, whereas
Geman finns are mre concerned with securirg existirg market
positions. FUrther llDti ves vary aoc:x>rdin::J to ci.rcumst:aJx:es,
perceptions am inlividual factors. In their nDSt recent investments
finns prefer full a..mership am control. '!he quality am potential of
management is a critical factor for success.