International Handbook on the Economics of Integration, Volume III
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International Handbook on the Economics of Integration, Volume III

Factor Mobility, Agriculture, Environment and Quantitative Studies

Edited by Miroslav N. Jovanović

With this Handbook, Miroslav Jovanović has provided readers with both an excellent stand-alone original reference book as well as an integral part of a comprehensive three-volume set. This introduction into a rich and expanding academic and practical world of international economic integration also provides a theoretical and analytical framework to the reader, presenting select analytical studies and encouraging further research.
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Chapter 6: International Mergers and Acquisitions

A. Edward Safarian


1 A. Edward Safarian 1 INTRODUCTION In recent years there has been a proliferation of types of international investors with increasing effects on the ideas of what constitutes appropriate corporate governance. Not so long ago the standard texts on international economics showed two forms of foreign ownership involving corporate control, namely foreign direct investment (FDI) with a sole or dominant owner and various types of joint venture with differing ownership and roles. Other forms of collaboration gradually came to receive close analysis. Researchers were slower to pick up on the dominant role of international mergers and acquisitions (M&As) in FDI in the industrial and emerging countries. More recently a variety of investment groups apart from multinational enterprises (MNEs) have also come to play a significant role in such M&As. Governments have become concerned with both the economic impact of international M&As generally and how state-owned and state-influenced corporations and funds affect national security and corporate governance. Such cross-border M&As have played an important role in international economic integration in conjunction with and often closely related to foreign trade, portfolio financing, migration of skilled and managerial workers, and in other ways (Jovanović, 2006, ch. 3). Note that this relationship is in both directions: economic integration can reduce some barriers to M&As while such M&As can increase country interdependence and also affect corporate policies. In many respects there are similarities between domestic and cross-border M&As, for example, in some of the motives. But there are...

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