Working Paper Series
Cross-Border Mergers & Acquisitions Policy in Service Markets
() and Lars Persson
Abstract: We provide facts showing that in service markets: (i)
restrictions on foreign direct investment (FDI) are under reform, (ii)
cross-border Mergers & Acquisitions dominate as the entry mode of FDI, and
(iii) there is often a high market concentration. Based on these facts, we
present a model for analyzing cross-border M&A policy in liberalized
service markets taking into account efficiency and market power effects.
Our findings suggest that a merger policy, but not a discriminatory policy
towards foreigners, seems warranted. Moreover, policies ensuring
competition for domestic target firms seem warranted. In this vein,
harmonization of the EU takeover regulations may particularly benefit
assets owners in countries with many target firms.
Keywords: Services; Mergers and Acquisitions; Investment Liberalization; Foreign Direct Investments; Ownership; (follow links to similar papers)
JEL-Codes: F23; K21; L13; O12; (follow links to similar papers)
39 pages, April 8, 2008
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