Closure and divestiture by foreign entrants: The impact of entry and post-entry strategies

We analyze the longevity of foreign entrants explicitly considering two pos sible ways of exit: firm closure and capital divestiture. We find that entr y and post-entry strategies affect the longevity of firms and of foreign eq uity holdings, but in different manners. While the ownership arrangements a nd organizational structure affect the likelihood of divestment they exert no significant effect upon closure. The entry mode exerts opposite effects on the two modes of exit, greenfield entrants being more likely to shutdown but less likely to be divested Only human capital affects closure and dive stment in the same manner. Finns with large endowments of human capital are less likely to exit, irrespective of the exit mode considered Copyright (C ) 2000 John Wiley & Sons, LM.