EconPapers    
Economics at your fingertips  
 

Cross-border mergers & acquisitions with financially constrained owners

Aron Berg, Pehr-Johan Norbäck () and Lars Persson

Review of World Economics (Weltwirtschaftliches Archiv), 2017, vol. 153, issue 3, 433-456

Abstract: Abstract Mergers give acquirers control over the assets of the merged entity and give sellers control over financial assets. We propose a cross-border merger model with home biased financially constrained owners in which the subsequent investments of the buyer and the seller can be determined. We show that policies blocking foreign acquisitions to protect the domestic industry can be counterproductive. Foreign acquisition can increase domestic owners’ investment in growth industries by reducing their financial restrictions. This calls for a “financial efficiency” defence in merger law. We also show that cross-border M&As are partly driven by the seller’s alternative investment opportunities.

Keywords: Investment liberalization; Mergers & acquisitions; Corporate governance; Ownership (search for similar items in EconPapers)
JEL-codes: F23 K21 L13 O12 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10290-017-0281-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:153:y:2017:i:3:d:10.1007_s10290-017-0281-5

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-04-19
Handle: RePEc:spr:weltar:v:153:y:2017:i:3:d:10.1007_s10290-017-0281-5