Cross-Border Mergers and Acquisitions: Innovative Capacity and National Economic Security
Based on capital accumulation and the capacity to innovate, we use an Edgeworth box and find that in a host country that lacks capital, if multinational corporations (MNCs) remit more profits back to their parent companies and invest less in the host country, the latter's R&D ability to innovate may decline. As a result, the host country's economic security could be threatened. An empirical test using Chinese data suggests that introducing foreign capital actively and promoting the innovation of small and medium-sized enterprises could help to maintain national economic security in cross-border M&A.
Volume (Year): 10 (2007)
Issue (Month): 4 ()
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