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Foreign ownership restrictions and cross-border markets for corporate control

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  • Moskalev, Sviatoslav A.
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    Abstract

    The paper investigates the link between host country laws restricting the ability of foreign bidders to conduct cross-border mergers and acquisitions (M&As) and the dynamics of domestic and foreign markets for corporate control. The results indicate that, as governments, especially governments of less wealthy, faster growing economies, relax their cross-border M&A laws, foreign bidders increase the number of cross-border M&As. The likelihood that foreign bidders establish cross-border M&As in which they obtain a controlling stake in the target is greater in host countries with less restrictive cross-border M&A laws. In such countries, foreign bidders are also more likely to use cross-border M&As than cross-border joint ventures as the means for entering the market. As host country cross-border M&A laws improve, foreign bidders are increasingly more likely to seek the types of entry modes that provide them with greater control over their investments.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Multinational Financial Management.

    Volume (Year): 20 (2010)
    Issue (Month): 1 (February)
    Pages: 48-70

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    Handle: RePEc:eee:mulfin:v:20:y:2010:i:1:p:48-70

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    Web page: http://www.elsevier.com/locate/mulfin

    Related research

    Keywords: Cross-border M&As Cross-border JVs Law and investment Corporate control;

    References

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    Cited by:
    1. Georgieva, Dobrina & Jandik, Tomas, 2012. "Alternative paths of convergence toward U.S. market and legal regulations: Cross-listing vs. merging with U.S. bidders," Journal of Multinational Financial Management, Elsevier, vol. 22(5), pages 230-251.

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