Multinationals may enter a host market by different modes of foreign direct investment (FDI). Two are widely used: Cross-Border M&A and Greenfield Investment. In practice, M&A transaction has increased dramatically in China over the last several years. This paper examines the choice of FDI modes, and makes a comparison between the two modes from the external and internal impacts. Then get the conclusion that we should choose the right mode according to the different situation about the firms in the international market. The purpose of this paper is going to analyze the two entry modes specifically and helps us better understand the two modes. This article consists of four parts. Part1 is a short introduction to China today. Part II briefly introduces the current status of M&A and Greenfield Investment. Part III compares the two entry modes from their implementations, cost, external and internal sides. At the last part, we get the conclusion and make the suggestions to our investors.
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