Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81183
Authors: 
Norbäck, Pehr-Johan
Persson, Lars
Year of Publication: 
2008
Series/Report no.: 
IFN Working Paper 743
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.
Subjects: 
Services
Mergers and Acquisitions
Investment Liberalization
Foreign Direct Investments
Ownership
JEL: 
F23
K21
L13
O12
Document Type: 
Working Paper

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