Abstract
This study examines the influence of informal institutional distance on the establishment mode strategies of foreign multinational enterprises (MNEs) in Ghana with the moderation role of experiential knowledge (related experience) and parent firm size. The empirical analysis is based on a sample of 223 green-field and acquisition market entries over the period 2001-2016, drawn from 20 countries. The study employs binomial logistic regression to establish the relationships among the variables, and the results reveal that high informal institutional distance leads to the preference for acquisitions over green-field investments. The study also finds that high level of experiential knowledge (related experience) and large parent firm size have positive relationship with acquisition establishment as compared to green-field investment. We therefore argue that strong related experience and large parent firm size strengthen the choice for acquisitions in relation to high informal institutional distance.
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