A Study On Motives Of Cross-border Mergers And Acquisitions By China's Private Enterprises: An Approach Of Eclectic Paradigm

The theory of the Cross-border Mergers and Acquisitions can be classified into two fields :the motives of M&As and the effects of M&As. The former is particularly important because the motives behind a phenomenon are the first thing which should be resolved.In this thesis, the definition of cross-border M&As is reviewed first, and then looks back upon the research of the motives of cross-border M&A with a brief commentary on them. As a popular framework for the analysis of the determinants of FDI, the OLI (ownership advantage, location advantage and internalization advantage) theory provides a useful outline to explain the motives for cross border M&As. After described its origin and historical process,especially the path of dynamic development with the essential change of international business environment , conclusion comes out that OLI theory after its dynamic development is suitable for developing country ,also for private enterprise of our country .The thesis then goes to the status of private enterprise cross-border M&As, focus on the size, motives, objectives, geographical location, and industries of it. Compare with the state-owned , private enterprises cross-border M&As have smaller size;aim at the core technology and market power;its targets are always overseas companies in an awkward predicament which lie in more developed market-oriented economy; the industry has turned from manufacturing to high technology. Based on the above analysis, this thesis will deal with the motives of private enterprises cross-border M&As. According to the OLI theory , known as the core theory of international direct investment,Chapter 4 reveals the competitive advantages which private enterprises expect to get from cross-border M&As . Upon on these advantages, a clear clue began to emerge, that is the core technology, the market power and the strategy centering on the core competitiveness. The key point is that searching for the core technology will be the basic motives among the three because attaining technology advantage can augment the core competitiveness for private enterprises, especially when the international competition which focus on R&D innovation are getting more and more fierce. However, there are several approaches to obtain the technology advantage. Here take Jingdongfang for example for further analysis. By adopts Wernerfelt's resource-based view and Goldratt's theory of constraint to expand Dunning's OLI Model and uses the expanded model to analyze constraint character of technology resource faced by private enterprises. It distinguishes causes of improving technology resource with motive factors of this kind of M&As. The thesis sums up that cross-border M&As should be conducted according to the quantity of improving technology resources when seeking for core technology.