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Implications Of Cross-Border Mergers and Acquisitions By TNCs in Developing Countries: A Beginner's Guide

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  • Sanjaya Lall

Abstract

International mergers and acquisitions have become the preferred mode of overseas investment by multinational companies, accounting for the bulk of FDI in the developed world and for increasing shares in the developing world. However, many governments express concern about this mode of MNC entry, preferring 'greenfield' investments to the takeover of national firms. This paper provides an overview of the main economic costs and benefits that may be involved and argues that M&As do have costs but these may be over-stated.

Suggested Citation

  • Sanjaya Lall, "undated". "Implications Of Cross-Border Mergers and Acquisitions By TNCs in Developing Countries: A Beginner's Guide," QEH Working Papers qehwps88, Queen Elizabeth House, University of Oxford.
    • Handle: RePEc:qeh:qehwps:qehwps88
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    File URL: http://workingpapers.qeh.ox.ac.uk/RePEc/qeh/qehwps/qehwps88.pdf
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    References listed on IDEAS

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    1. Görg, Holger, 1998. "Analysing Foreign Market Entry: The Choice between Greenfield Investment and Acquisitions," Economics Technical Papers 981, Trinity College Dublin, Department of Economics.
    2. Gonzalez, Pedro & Vasconcellos, Geraldo M. & Kish, Richard J., 1998. "Cross-border mergers and acquisitions: The undervaluation hypothesis," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(1), pages 25-45.
    3. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(3), pages 411-432, September.
    4. Henrik Bresman & Julian Birkinshaw & Robert Nobel, 1999. "Knowledge Transfer in International Acquisitions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(3), pages 439-462, September.
    5. Jean-François Hennart & Young-Ryeol Park, 1993. "Greenfield vs. Acquisition: The Strategy of Japanese Investors in the United States," Management Science, INFORMS, vol. 39(9), pages 1054-1070, September.
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    1. Liu, Xiaohui & Zou, Huan, 2008. "The impact of greenfield FDI and mergers and acquisitions on innovation in Chinese high-tech industries," Journal of World Business, Elsevier, vol. 43(3), pages 352-364, July.
    2. Álvarez, Isabel & Marín, Raquel, 2010. "Entry modes and national systems of innovation," Journal of International Management, Elsevier, vol. 16(4), pages 340-353, December.
    3. P.L. Beena, 2004. "Towards understanding the merger-wave in the Indian corporate sector: A comparative perspective," Centre for Development Studies, Trivendrum Working Papers 355, Centre for Development Studies, Trivendrum, India.
    4. Isabel Alvarez & Georgina Maldonado, 2009. "Technology, foreign-owned firms and competitiveness in the middle-income countries," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 56, pages 397-419, November.
    5. Quan-Hoang Vuong & Tran Tri Dung & Thi Chau Ha NguyenN, 2009. "Mergers and Acquisitions in Vietnam’s Emerging Market Economy, 1990-2009," Working Papers CEB 09-045.RS, ULB -- Universite Libre de Bruxelles.
    6. Kazuhiko Yokota & Kung-Ming Chen, 2012. "R&D Spillovers and Foreign Market Entry: Acquisition versus Greenfield Investment," International Economic Journal, Taylor & Francis Journals, vol. 26(2), pages 265-280, December.

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