Globalization and profitability of cross-border mergers and acquisitions

Norbäck, Pehr‐Johan; Persson, Lars

doi:10.1007/s00199-007-0237-4

Cited by 44 publications

(46 citation statements)

References 26 publications

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“…The latter is included because it is plausible to suppose that the foreign firm might be able to make a series of all-or-nothing offers until someone accepts, giving all rents to the foreign firm. As should be clear from (20) and (23), this is equivalent to setting α = 1.…”

Section: Discussionmentioning

confidence: 99%

Endogenous Market Structure and Foreign Market Entry

Markusen

Stähler

2009

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Models dealing with cross-border acquisitions versus greenfield investment usually assume that the entry of a foreign firm into a market has effects on the outputs of all domestic firms in that market, but exit or entry of local firms is not considered. The purpose of this paper is to re-examine the acquisition versus greenfield versus exporting question under fixed versus free entry assumptions for local firms. Our finding is that greenfield entry and exporting options are more attractive relative to acquisition when the local market structure adjusts to foreign entry through local entry or exit than when it is fixed. The entering foreign firm may do better or worse under free entry versus a fixed market structure depending on its optimal choice under the latter assumption.

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Section: Discussionmentioning

confidence: 99%

Endogenous Market Structure and Foreign Market Entry

Markusen

Stähler

2009

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“…The proof follows directly from Proposition 4, section 5.2, and Appendix A.3 in Norbäck and Persson (2008).…”

Section: Endogenous Acquisition Pricesmentioning

confidence: 96%

“…The acquisition process We follow Norbäck and Persson (2008) in modelling the acquisition process as an auction. 25 The two domestic firms, 1 and 2, post selling bids to the multinational.…”

Section: Endogenous Acquisition Pricesmentioning

confidence: 99%

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Subsidy competition and the mode of FDI

Albornoz

Corcos

Kendall

2009

Regional Science and Urban Economics

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We model subsidy competition for a foreign MNC's investment in two trading partners. Taking into account acquisitions as an alternative investment mode weakens the case for subsidising greenfield investment. Competition between countries results in welfare losses, which are reinforced by positive externalities from the MNC's presence and regional integration. The results also apply to situations where the acquisition price accounts for the possibility of subsidies and when governments use acquisition subsidies as an alternative to greenfield subsidies. JEL-Classification: F15, F21, F23

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“…3 See for example, Markusen (1995Markusen ( , 2002, Norback and Persson (2002), Neary (2002Neary ( , 2003, Markusen and Venables (1999), Mattoo et al (2004), Blalock and Gertler (2008) owned by foreign capitalists 6 so that the return from it is fully repatriated. The endowments of the three primary inputs in the economy are , L K and N , respectively.…”

Section: Introductionmentioning

confidence: 99%