Cross-border mergers and acquisitions vs. greenfield foreign direct investment: The role of firm heterogeneity

2007 ◽  
Vol 72 (2) ◽  
pp. 336-365 ◽  
Author(s):  
Volker Nocke ◽  
Stephen Yeaple
Keyword(s):  
Foreign Direct Investment ◽  
Mergers And Acquisitions ◽  
Direct Investment ◽  
Firm Heterogeneity ◽  
Cross Border

Foreign Direct Investment

2017 ◽  
Author(s):  
Yilmaz Akyüz
Keyword(s):  
Foreign Direct Investment ◽  
Mergers And Acquisitions ◽  
Financial Markets ◽  
Foreign Exchange ◽  
Direct Investment ◽  
Balance Of Payments ◽  
Productive Capacity ◽  
Cross Border ◽  
Direct Contribution ◽  
High Profit

Recent years have also seen increased openness of EDEs to foreign direct investment (FDI) in search for faster growth and greater stability. However, FDI is one of the most ambiguous and least understood concepts in international economics. Common debate is confounded by several myths regarding its nature and impact. It is often portrayed as a stable, cross-border flow of capital that adds to productive capacity and meets foreign exchange shortfalls. However, the reality is far more complex. FDI does not always involve inflows of financial or real capital. Greenfield investment, unlike mergers and acquisitions, makes a direct contribution to productive capacity, but can crowd out domestic investors. FDI can induce significant instability in currency and financial markets. Its immediate contribution to balance-of-payments may be positive, but its longer-term impact is often negative because of high-profit remittances and import contents.

Does the origin matter? The effects of cross-border mergers and acquisitions in France

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Federico Carril-Caccia
Keyword(s):  
Foreign Direct Investment ◽  
Mergers And Acquisitions ◽  
Direct Investment ◽  
Developed Countries ◽  
Emerging Countries ◽  
Intangible Asset ◽  
Data Set ◽  
Content Type ◽  
Cross Border ◽  
The Impact

PurposeThe present article analyses the effects of cross-border mergers and acquisitions (CBM&As) on targets' total factor productivity (TFP), employment, wages and intangible-asset investment. The author investigates whether the impact of CBM&As differs depending on the origin of the investing multinational (MNE). The author distinguishes between CBM&As from European countries, other developed countries and emerging countries.Design/methodology/approachThe author makes use of a unique firm-level data set of foreign direct investment in the French manufacturing sector. The authors applies propensity score matching and difference in differences to estimate the effect of CBM&As.FindingsThe results show that the consequences of CBM&As differ strongly depending on the origin. CBM&As from European MNEs have a positive impact on TFP, wages and intangible-asset investment, and those from emerging countries seem to increase wages and intangible-asset investments. In contrast, CBM&As that originate from MNEs from other developed countries do not have a significant effect.Originality/valueThis article contributes to the growing literature on the effects of foreign direct investment that highlights the relevance of accounting for the MNEs' origin. In particular, it is the first to address the impact of emerging-country MNEs' CBM&As in Europe.

World capital flows under global instability

2021 ◽  
pp. 68
Author(s):  
I. Kvashnina
Keyword(s):  
Economic Policy ◽  
Foreign Direct Investment ◽  
Economic Crisis ◽  
Capital Flows ◽  
Direct Investment ◽  
International Institutions ◽  
Global Instability ◽  
Cross Border ◽  
Role Of The State

The article examines the changes in the cross-border capital flows that have taken place in recent years, including those caused by COVID-19 pandemic and economic crisis.   Negative trends in the movement of foreign direct investment are noted and the prospects for their growth are analyzed. Considering the measures of economic policy in relation to investment, the author comes to the conclusion that the role of the state will inevitably strengthen, as well as that of  international institutions.

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