Assessing China’s Economic Catch-up in a Comparative Perspective

Chapter 5 assesses China’s catch-up model, often called the Beijing Consensus, in a comparative perspective. China’s model shares several elements of the East Asian model because it also pursued the export-oriented, outward-looking growth strategies. A further commonality lies in its emphasis on the elements missing from the Washington Consensus, namely, technology policy and higher education revolution. However, the Chinese catch-up model has several unique elements that are not found in that of Taiwan or Korea. These unique features include the following: first, parallel learning from foreign direct investment firms, followed by active promotion of indigenous firms; second, forward engineering (the role of university spin-off firms) in contrast to reverse engineering adopted in Korea and Taiwan; and third, acquisition of foreign technology and brands through international mergers and acquisitions. In general, these strategies help China achieve a “compressed catch-up” and avoid several of the risks involved, including that of the “liberalization trap,” where premature financial liberalization leads to macroeconomic instability.

How Do Firms Promote Green Innovation through International Mergers and Acquisitions: The Moderating Role of Green Image and Green Subsidy

Carrying out green innovation is beneficial for firms to cope with environmental protection pressure and achieve sustainable development. Existing research has paid enough attention to the driver of green innovation, but still does not reveal how green innovation can be conceived and realized. This paper answers the above question from the perspective of international M&As, examines the relationship between exploratory international M&As, exploitative international M&As and green innovation performance, and further probes into how strategic and environmental factors moderate the green innovation effectiveness of exploratory and exploitative M&As. Results indicate that exploratory and exploitative international M&As both are beneficial for green innovation performance, and to maximize green innovation performance, implementing exploratory M&As is more beneficial for firms pursuing high green image and operating in a high green subsidy environment. By contrast, carrying out exploitative M&As is more effective for firms pursuing low green image and operating in a low green subsidy environment. Theoretical and managerial implications are discussed.

CURRENT TRENDS IN INTERNATIONAL MERGERS AND ACQUISITIONS OF PHARMACEUTICAL COMPANIES

The article analyzes the results of mergers and acquisitions of global pharmaceutical companies and their impact on the global pharmaceutical industry. The relevance of this research is determined by the high significance of mergers and acquisitions of global pharmaceutical companies on the global pharmaceutical industry and market. A comprehensive approach is used to assess the impact of mergers and acquisitions of pharmaceutical companies on the global pharmaceutical industry. The article presents statistical data on the volume and number of venture investments in the pharmaceutical and biotechnological industries. The reasons for mergers and acquisitions by pharmaceutical companies, as well as the dynamics of the activity of such transactions, are determined. The geographical structure of stock transactions and the total number of mergers and acquisitions of pharmaceutical companies are presented, as well as examples of the largest mergers and acquisitions of pharmaceutical companies.

Features of «Mergers» and «Acquisitions» of Companies in International Business

The publication presents features of the modern mergers and acquisitions (M&A) process. It should be noted that in the modern world, with the growing global competition, aggressive policies of individual market participants, rapid technological changes, financial regulation and the changing role of the State in the economy, there is a need to expand the activities of large companies. The majority of the most successful companies choose the joint mode of development, such as mergers and acquisitions. As a result of mergers and acquisitions, business will grow and become more influential, and not only national governments, but also international economic organizations will not be able to depend on regulation and management. Today, among the leading domestic or foreign economists there is no consensus on the definition of the concepts of «mergers» and «acquisitions», which is explained by the diversity and complexity of the nature of these processes. The main types of these processes have been identified and their characterizations are provided. When researching the processes of mergers and acquisitions of enterprises, their main differences are determined. It is proved that in an ever-changing market, increased competition and well-thought-out and well-made transactions on international mergers and acquisitions can significantly increase the value of companies. At the present stage, international mergers and acquisitions occupy strong positions in the policy of private companies as the main strategic instrument for business development.

The impact of terrorism on international mergers and acquisitions: Evidence from firm-level decisions

Does terrorism inhibit a country’s ability to attract international direct investment? If so, terrorism may have large costs in terms of employment losses, macroeconomic instability, and missed development opportunities. However, do investors fear terrorism because of direct risks to their assets, or because the opportunities in the host country deteriorate? And how do they adjust investments? We study the impact of terrorism on merger and acquisition decisions of 8,872 firms over 116 countries over 16 years. The firm-level perspective allows the isolation of host-country terrorism from firm-level characteristics such as size or experience as an explanation, by comparing decisions for the same firm across destinations. It also allows separation of investment responses into reductions or entire withholding of investment. A sample standard deviation increase in terrorism reduces merger and acquisition investment by around 30%. Firms do not generally reduce the size of their investment in the face of terrorism – instead, they decide not to enter the country altogether. We find no evidence to suggest that multinational firms are more sensitive to attacks on local business assets. A country-level analysis, which necessarily does not control for firm-level characteristics, yields materially different conclusions.

Trade policy in a “GVC World”: Multinational corporations and trade liberalization

The globalization of production is changing the political economy of trade policymaking: Traditional supporters of free trade (exporters seeking market access in foreign countries) are joined by new actors (companies needing intermediates from abroad for their production processes) in their lobbying efforts for trade liberalization. Multinational corporations (MNCs) play a crucial role in this new alliance due to their strong involvement in international trade and endowment with resources that can be used to lobby policymakers. We derive an argument from these premises that leads to the expectation of variation in trade policy outcomes across industries depending on their degree of integration in a global network of multinational corporations. Disaggregated data on the level of tariffs and speed of tariff cuts in preferential trade agreements, international mergers and acquisitions at the firm level, and MNC imports of intermediates by sector allow us to test the argument. The findings support our theoretical expectations. The paper sheds light on the processes and outcomes of trade policymaking in a globalized economy by further developing an existing argument about GVCs and trade policy outcomes as well as expanding on it by adding data on international corporate connections.

Foreign Direct Investment and International Technology Diffusion

Foreign direct investment (FDI) plays an important role in facilitating the process of international technology diffusion. While FDI among industrialized countries primarily occurs via international mergers and acquisitions (M&As), investment headed to developing countries is more likely to be greenfield in nature; that is, it involves the establishment or expansion of new foreign affiliates by multinational firms. M&As have the potential to yield productivity improvements via changes in management and organization structure of target firms, whereas greenfield FDI leads to transfer of novel technical know-how by initiating the production of new products in host countries as well as by introducing improvements in existing production processes. Given the prominent role that multinational firms play in global research and development (R&D), there is much interest in whether and how technologies transferred by them to their foreign subsidiaries later diffuse more broadly in host economies, thereby potentially generating broad-based productivity gains. Empirical evidence shows that whereas spillovers from FDI to competing local firms are elusive, such is not the case for spillovers to local suppliers and other agents involved in vertical relationships with multinationals. Multinationals have substantially increased their investments in research facilities in various parts of the world and in R&D collaboration with local firms in developing countries, most notably China and India. Such international collaboration in R&D spearheaded by multinational firms has the potential to accelerate global productivity growth.