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Cross-Border Mergers and Acquisitions: Their Role in Industrial Globalisation

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  • Nam-Hoon Kang
  • Sara Johansson

Abstract

This paper examines recent trends and drivers of cross-border mergers and acquisitions (M&As) which grew six-fold in 1991-98 and now account for more than 85% of foreign direct investment. They are prompted by a range of factors, including excess capacity and increased competition in traditional industries and new market opportunities in high-technology sectors. However, the main driver of M&As in place of greenfield investment is the need to acquire complementary intangible assets –technology, human resources, brand names, etc. In allowing for global industrial restructuring and efficiency gains, crossborder M&As can yield dividends in terms of company performance and profits. The extent to which they result in benefits for home and host countries is argued to be strongly influenced by policy frameworks ... Fusions et acquisitions internationales : Leur rôle dans la mondialisation de l'industrie Le présent document analyse les tendances récentes en matière de fusions et acquisitions (F-A) internationales, ainsi que les éléments moteurs de ces regroupements, qui se sont multipliés par six entre 1991 et 1998 pour représenter actuellement plus de 85 % des investissements directs étrangers. Ils résultent d’une série de facteurs, notamment les surcapacités et l’intensification de la concurrence dans les activités traditionnelles ainsi que des nouveaux débouchés qui s’offrent dans les secteurs de haute technologie. Toutefois, le principal facteur qui conduit les entreprises à préférer les F-A aux nouveaux investissements est la nécessité d’acquérir des actifs incorporels complémentaires – technologie, ressources humaines, marques commerciales, etc. Les F-A internationales, qui sont à l’origine d’une restructuration industrielle à l’échelle mondiale et de gains d’efficience, peuvent avoir des effets positifs sur les résultats des entreprises. On fait valoir que les avantages ...

Suggested Citation

  • Nam-Hoon Kang & Sara Johansson, 2000. "Cross-Border Mergers and Acquisitions: Their Role in Industrial Globalisation," OECD Science, Technology and Industry Working Papers 2000/1, OECD Publishing.
  • Handle: RePEc:oec:stiaaa:2000/1-en
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    File URL: http://dx.doi.org/10.1787/137157251088
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    Cited by:

    1. Huyghebaert, Nancy & Luypaert, Mathieu, 2010. "Antecedents of growth through mergers and acquisitions: Empirical results from Belgium," Journal of Business Research, Elsevier, vol. 63(4), pages 392-403, April.
    2. Bertrand, Olivier & Zuniga, Pluvia, 2006. "R&D and M&A: Are cross-border M&A different? An investigation on OECD countries," International Journal of Industrial Organization, Elsevier, pages 401-423.
    3. Francis, Bill B. & Hasan, Iftekhar & Sun, Xian, 2008. "Financial market integration and the value of global diversification: Evidence for US acquirers in cross-border mergers and acquisitions," Journal of Banking & Finance, Elsevier, vol. 32(8), pages 1522-1540, August.
    4. Stephen Roper & Seamus Grimes, 2003. "Wireless Valley, Silicon Wadi and Digital Island - Helsinki, Tel Aviv and Dublin in the ICT Boom," ERSA conference papers ersa03p62, European Regional Science Association.
    5. Stefanie A. Haller, 2005. "The Impact of Multinational Entry on Domestic Market Structure and R&D," Economics Working Papers ECO2005/16, European University Institute.
    6. Ezcurra, Roberto & Rodríguez-Pose, Andrés, 2013. "Does Economic Globalization affect Regional Inequality? A Cross-country Analysis," World Development, Elsevier, pages 92-103.
    7. Heywood, John S. & McGinty, Matthew, 2011. "Cross-border mergers in a mixed oligopoly," Economic Modelling, Elsevier, vol. 28(1-2), pages 382-389, January.
    8. Albert N. Link & David Paton & Donald S. Siegel, 2005. "An econometric analysis of trends in research joint venture activity," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 149-158.
    9. Mirella Daminai & Fabrizio Pompei, 2008. "Mergers, acquisitions and technological regimes: the European experience over the period 2002-2005," Quaderni del Dipartimento di Economia, Finanza e Statistica 46/2008, Università di Perugia, Dipartimento Economia.
    10. Campa, Jose M. & Hernando, Ignacio, 2002. "Value creation in European M&As," IESE Research Papers D/471, IESE Business School.
    11. Cantwell, John & Santangelo, Grazia D., 2006. "The boundaries of firms in the new economy: M&As as a strategic tool toward corporate technological diversification," Structural Change and Economic Dynamics, Elsevier, vol. 17(2), pages 174-199, June.
    12. Hans-Martin Zademach, 2006. "Germany as an emerging archipelago economy: On some less obvious implications of corporate takeovers and mergers," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(1), pages 40-45, April.
    13. José Manuel Campa & Ignacio Hernando, 2002. "Value creation in European M&As," Working Papers 0223, Banco de España;Working Papers Homepage.
    14. Simon Evenett, 2004. "The Cross-Border Mergers and Acquisitions Wave of the Late 1990s," NBER Chapters,in: Challenges to Globalization: Analyzing the Economics, pages 411-470 National Bureau of Economic Research, Inc.

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