We examine the financial management of seven cases on industry-leading Dutch firms investing in Europe. Our results are as follows. While the internationalisation of the firm is largely fixed before a current investment, quite varying strategic analyses do shape the outline of the actual financial analysis. As financial modelling gets more detailed and diverse over time, the emphasis shifts from accounting to present value selection methods. Financial risks do not always matter that much, but financing aspects receive a place in the process. Organisation and behaviour do not play independent roles, but it matters to nurture culture and communication. The firms' investment patterns found mainly vary as to growth strategies (acquisitions or greenfields), size of the firm, investment size and corporate governance style.
An increasing number of firms grow by investing abroad. Though mostly nearby countries are at stake, investment processes soon become complex. Even so, we still need a framework that reconciles foreign direct investment processes in adjoining countries. Dutch practices in Europe will be used to exemplify such a model. Dutch firms are among the world's main investors and their investments in a changing Europe may be interesting. We use a financial management perspective to examine the processes with seven cases. The research strategy employed and the research objects selected are accounted for in § 2. A comprehensive conceptual model on financial management with European investments is outlined in § 3. Patterns of similarities and differences with the cases are searched for in § 4. The conclusions to the case study are given in § 5. Suggestions to practice and science finally follow in § 6.
2. Research strategy and research objects
The research strategy united the experience of the reporting researcher, a vast literature survey and a multiple case research study. A first research model was largely drawn from the author's involvement with foreign direct investments (FDI's) in foremost Europe. The actual results of the firms dealt with were mostly satisfying, but not always encouraging: some of the firms even went bankrupt. There was much literature about many aspects of FDI processes, which might have been of help to these investors'. However, often either greenfield investments or mergers and acquisitions were studied, whereas a comprehensive analytical financial management perspective was absent. It was felt that research on actual practices would offer deeper and broader knowledge on this matter. Therefore, a process oriented field research approach dominated the research strategy in the years 1999 to 2001.
The field research was framed as a multiple case study. Case research was partly carried out real-time, balancing on the delineation between the research and its context, while the number of variables mounted and information was tapped from various sources [Yin, 1994]. The actual case selection and a small questionnaire added a limited survey character to the mainly qualitative study. The case research was divided into three largely discernable phases. In the preparation phase, the problem statement was formulated and put into a conceptual framework, at the same time practicing with a case of a non-European investment. In the execution phase, the seven cases were studied extensively, largely led by personal contact with a key informant. The conceptual model was filled in during the analysis phase. Patterns were searched for, the model was examined and final remarks were formulated.
European investments mainly occurred in the European Union (EU). The EU had a common market, joint policies on growth, free markets and competitiveness, as well as much influence in Central and Southeast Europe [http://europa.eu.int, 2002]. Local competition was fuelled by corporate law harmonisation, preventive supervision on concentration and decreasing fiscal competition. …