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Cross-border M & As Performance Issues And Its Practical Significance

Posted on:2006-03-08Degree:MasterType:Thesis
Country:ChinaCandidate:F LiFull Text:PDF
GTID:2206360152488174Subject:International Trade
Abstract/Summary:PDF Full Text Request
The surging trend of economic globalization has driven the rapid growth of international capital flows. The fast growth of foreign direct investment (FDI) is the most significant characteristic in the changes of the pattern of international capital flow. FDI has become an increasingly important factor affecting the economies of various countries, various regions and even the whole globe. Mergers & Acquisitions (M&A) has become in the recent years a main investment vehicle for cross-border transactions worldwide. Mergers and acquisitions (M&A) have been the driving force behind the rapid increase in global foreign direct investment (FDI) flows.The earlier mergers & acquisitions activities occurred in the United Stated, and most of them were in the periods of continuous economic increase. The experiences of the US, Japan and EU demonstrate that multinational enterprises improve their own advantages by means of M&A in severe global competition. Since mergers and acquisitions have emerged in developed western markets in late 19th century, M&A have experienced five waves. These days, approximately 80 percent of all global transactions are implemented by way of M&A transactions. In China, only 5 percent of foreign capital is from M&A transactions.Facing the opportunities and challenges after entry into WTO, China is adjusting the policies of utilizing foreign capital step,by step. And the utilization patterns are transferring from traditional ways to M&A. China has even more potential in FDI absorption through mergers and acquisitions. Therefore, it has great significance to study the results brought by M&A to all the participants intensively, finding out experiences and efficient ways for Chinese corporations.The following are characteristics of this paper in analysis:1. The author explains the ultimate effects of M&A from three aspects, which include multinational enterprise, the host country and target corporation.2. In accordance with the theories of foreign direct investment, multinationalenterprises financial management, mainstream economics and finance, the author analyzes the essence of international M&A from a more rational aspect.3. To capture 'best practice1 in cross-border M&A integration, seeking the suitable way of M&A in China from several aspects, such as M&A control, environmental improvement, etc.4. Using the conclusion in our actual situation, the author puts forward suggestions for SOEs' reform, industrial structure adjustment and large multinational enterprises' development according to the theoretical analysis.Through analyzing all the participants of M&A, we can see that as the mainstream investment style, foreign investment by way of merger and acquisition can surely bring more benefits than Greenfield investment and others do. However, there are dangers with this form of foreign investment. This paper lays stress on how to utilize M&A in promoting Chinese economic development.In a word, based on the essential theory of M&A, the author makes a deep-going study on the results brought by merger and acquisition activities from all parts. This paper evaluates M&A effects on Chinese domestic economy and our countermeasures by comparing and drawing the lessons of foreign countries, and finally demonstrates the feasibility of Chinese domestic companies make merger and acquisition overseas in accordance with the Going Out Strategy.
Keywords/Search Tags:Cross-Border Mergers and Acquisitions, Foreign Direct Investment, Effect Evaluation, M&A Control
PDF Full Text Request
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