Cross-Border Mergers & Acquisitions Policy in Service Markets

Pehr-Johan Norbäck and Lars Persson

No 743, Working Paper Series from Research Institute of Industrial Economics

Abstract: We provide facts showing that in service markets: (i) restrictions on foreign direct investment (FDI) are under reform, (ii) cross-border Mergers & Acquisitions dominate as the entry mode of FDI, and (iii) there is often a high market concentration. Based on these facts, we present a model for analyzing cross-border M&A policy in liberalized service markets taking into account efficiency and market power effects. Our findings suggest that a merger policy, but not a discriminatory policy towards foreigners, seems warranted. Moreover, policies ensuring competition for domestic target firms seem warranted. In this vein, harmonization of the EU takeover regulations may particularly benefit assets owners in countries with many target firms.

Keywords: Services; Mergers and Acquisitions; Investment Liberalization; Foreign Direct Investments; Ownership (search for similar items in EconPapers)
JEL-codes: F23 K21 L13 O12 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2008-04-08
New Economics Papers: this item is included in nep-com, nep-law, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: Cross-Border Mergers & Acquisitions Policy in Service Markets (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0743

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