Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94674
Authors: 
Horn, Henrik
Persson, Lars
Year of Publication: 
1999
Series/Report no.: 
IUI Working Paper 515
Abstract: 
Mergers and acquisitions (M&A) is the dominant form of Foreign Direct Investment (FDI), but has received but scarce attention in the theory literature on trade and investment. This paper highlights how the international pattern of ownership of productive assets may depend on features of trade and production costs. It suggests how high trade costs may be conductive to national ownership of assets, while international firms may arise at lower trade costs, contrary to what the 'tariff jumping' argument would suggest. It also shows how private and social incentives for M&A may differ for weak merger synergies, but converge when synergies are stronger.
Subjects: 
International mergers
Endogenius market structure
Tariff jumping FDI
JEL: 
F23
L13
Document Type: 
Working Paper

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