2006–2010

Investment Liberalization – Why a Restrictive Cross-Border Merger Policy can be Counterproductive

Reprint No. 2007:11

Author(s): Pehr-Johan Norbäck and Lars PerssonYear: 2007 Title: Journal of International Economics Volume (No.): 72 (2) Pages: 366–380


Investment liberalizing countries are often concerned that cross-border mergers and acquisitions, in contrast to greenfield investments, might have an adverse effect on domestic firms and consumers. However, given that domestic assets are sufficiently scarce, we identify a preemption effect and an asset complementarity effect, which imply that the acquisition price is substantially higher than the domestic seller's profits. Moreover, we show that for the acquisition to take place, the MNE must be sufficiently efficient when using the domestic assets, otherwise rivals will expand their business, thereby making the acquisition unprofitable. Consequently, restricting cross-border M&As may also hurt consumers.


Reference:
Norbäck, Pehr-Johan, and Lars Persson (2007), "Investment Liberalization – Why a Restrictive Cross-Border Merger Policy can be Counterproductive". Journal of International Economics 72(2), 366–380.

Pehr-Johan Norbäck

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Ph: +46 8 665 4522
Mob: +46 73 574 3379
pehr-johan.norback@if...

Lars Persson

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Ph: +46 8 665 4504
lars.persson@ifn.se

Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective

Pages-from-2019-Calmfors-Gassen---Integrating-Immigrants-into-the-Nordic-Labour-Markets.gif

Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

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