Paper #231

Títol:

Multinationals, technology networks and international takeovers

Autors:

M. Àngels Oliva i Luis Rivera-Bátiz

Data:

Setembre 1997

Resum:

We formulate a knowlegde--based model of direct investment through mergers and acquisitions. M&As are realized to create comparative advantages by exploiting international synergies and appropriating local technology spillovers requiring geographical proximity, but can also represent a strategic response to the presence of a multinational rival. The takeover fee paid tends to increase with the strength of local spillovers which can thus work against multinationalization. Seller's bargaining power increases the takeover fee, but does not influence the investment decision. We characterize losers and winners from multinationalization, and show that foreign investment stimulates research but could result in a synergy trap reducing multinationals' profits.

Paraules clau:

multinationals, spillovers, networks, mergers and acquisitions

Codis JEL:

C78, D43, F23, G34, O32

Àrea de Recerca:

Finances i Comptabilitat

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