International Mergers with Financially Constrained Owners

Arbeitspapier

This paper proposes a cross-border M&A model with financially constrained owners in which the identity of the buyer and seller can be determined. We show that policies blocking foreign acquisitions to protect the domestic industry can be counterproductive. Foreign acquisition can increase the domestic owner’s investment in growth industries by reducing their financial restrictions. This calls for a ”financial” efficiency defense in the merger law. We also show that cross-border M&As are not only driven by effects on the merged entity, but also driven by the seller’s alternative investment opportunities.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFN Working Paper ; No. 927

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; Antitrust Law ; Oligopoly and Other Imperfect Markets ; Microeconomic Analyses of Economic Development
• Subject: Investment Liberalization ; Mergers & Acquisitions ; Corporate Governance ; Ownership

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Berg, Aron ; Norbäck, Pehr-Johan ; Persson, Lars
• Event: Veröffentlichung
• (who): Research Institute of Industrial Economics (IFN)
• (where): Stockholm
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/81336
• Last update: 10.03.2025, 11:44 AM CET