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Comparative Study On Greenfield Investment And M&A Of MNBs In China

Posted on:2005-04-19Degree:MasterType:Thesis
Country:ChinaCandidate:X D QiuFull Text:PDF
GTID:2156360122499121Subject:Finance
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Beginning with the eighties of the 20th century, the whole world witnessed financial globalization's accelerating, the highlight of which is MNBs' entry into emerging markets, the main reason of which is that most governments lossen their supervision over finance and adopt policy of financial liberalization. At the end of 2001, China, as a developing country(also is a emerging market), joined WTO and promised to open its bank industry gradually. Ever since then, FDI of MNBs in China increases incredibly, especially M&A of MNBs in China occurred eleven times within three years. At the same time, MNBs increased their branches by 41 from July of 2003 to April of 2004.Doubtlessly, MNBs' entry will cast profound impacts on China' economy and welfare of its citizens. Given the important status of bank industry in a country, it is useful in terms of theory and practice to explore FDI of MNBs in China. FDI includes Greenfield investment and M&A. This paper, with the title of comparative study on Greenfield investment and M&A of MNBs in China, on the part of MNBs, researches FDI mode of MNBs in China. Based on the experience of MNBs' entry into other emerging markets, this paper aims at helping authorities of China and domestic banks to take up measures in the face of MNBs' entry, to absorb beneficial factors and hold up negative factors, and finally harmonize the relationship among financial security, financial efficiency and social stability.We make use of two research methods in this paper. First is game theory, which is used in chapter three and chapter five. In chapter three, we build a Hotelling model to analyze the comparison between Greenfield investment and M&A, then get the conclusion: four exogenous variables (include costs of Greenfield investment, technique condition of domestic bank, consumers' surplus and competitive intensity) impose impacts on three crucial value (include M&A price, monopoly profit and profit of Greenfield investment), As a result, they influence the choice between these two modes.3In chapter five, we probe the countermeasure between MNBs and authorities and domestic banks in the choice of two entry modes. Second method is comparison, in chapter four, we compare the barriers of Greenfield investment and M&A, the costs of them and benefits of them. At last, we get the conclusion. M&A is going to be the mainstream entry mode in recent years because its advantages will last for a long time, and MNBs will go on favoring M&A. At the same time, MNBs will cherish the precious opportunities to build branches, and keep on creating branches in relatively developed cities, coastal citis and provincial cities.
Keywords/Search Tags:MNBs, Greenfield investment, Transnational M&A
PDF Full Text Request
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