Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81336
Authors: 
Berg, Aron
Norbäck, Pehr-Johan
Persson, Lars
Year of Publication: 
2012
Series/Report no.: 
IFN Working Paper 927
Abstract: 
This paper proposes a cross-border M&A model with financially constrained owners in which the identity of the buyer and seller can be determined. We show that policies blocking foreign acquisitions to protect the domestic industry can be counterproductive. Foreign acquisition can increase the domestic owner’s investment in growth industries by reducing their financial restrictions. This calls for a ”financial” efficiency defense in the merger law. We also show that cross-border M&As are not only driven by effects on the merged entity, but also driven by the seller’s alternative investment opportunities.
Subjects: 
Investment Liberalization
Mergers & Acquisitions
Corporate Governance
Ownership
JEL: 
F23
K21
L13
O12
Document Type: 
Working Paper

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