Why do Danish Farmers Internationalize through FDI into Eastern Europe?

Henrik Edlenborg Mortensen

Student thesis: Master thesis

Abstract

In this paper we will explore what drives large Foreign Direct Investment outflows from Denmark into Eastern Europe. We will be utilizing the eclectic paradigm in combination with multiple theories to discover how large multinational farms have grown over the last 20 years to become multinational farms. Using a set of hypotheses, we find out that the Danish Agricultural FDI outflows, which constitute 60 billion DKK investments globally, are driven by managerial experience to lower transactional costs in an attempt to integrate their value chains and thereby save capital. The farms do not have strong Ownership Advantage in the beginning, they instead exploit their strong insidership advantage. We find that there still exists an open window of opportunity, which does not serve as a sustainable advantage, but is still a strong motivator for farms to move to Eastern Europe. We also find, that Danish Agricultural FDI is not an attempt to circumvent Danish legislation, but due to overall attractive market conditions. We contribute to a sparse literature and ask a series of questions on how the International Business field can continue to work progressively toward a better understanding of the phenomenon of large Danish Foreign Direct Investments into Eastern Europe.

Educations, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages104