Investment Liberalization - Why a Restrictive Cross-Border Merger Policy can be Counterproductive

Arbeitspapier

Investment liberalizing countries are often concerned that cross-border mergers & acquisitions, in contrast to greenfield investments, might have an adverse effect on domestic firms and consumers. However, given that domestic assets are sufficiently scarce, we identify a preemption effect and an asset complementarity effect, which imply that the acquisition price is substantially higher than the domestic seller's profits. Moreover, we show that for the acquisition to take place, the MNE must be sufficiently efficient when using the domestic assets, otherwise rivals will expand their business, thereby making the acquisition unprofitable. Consequently, restricting cross-border M&As may also hurt consumers.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IUI Working Paper ; No. 644

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multinational Firms; International Business ; Antitrust Law ; Oligopoly and Other Imperfect Markets ; Microeconomic Analyses of Economic Development
• Thema: Investment Liberalization ; Mergers & Acquisitions ; Development ; Ownership ; Internationales Investitionsrecht ; Deregulierung ; Übernahme ; Wirkungsanalyse ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Norbäck, Pehr-Johan ; Persson, Lars
• Ereignis: Veröffentlichung
• (wer): The Research Institute of Industrial Economics (IUI)
• (wo): Stockholm
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/81250
• Letzte Aktualisierung: 20.09.2024, 08:20 MESZ