The effects of cross-border and cross-industry mergers and acquisitions on home-region and global multinational enterprises

We examine the effects of international and product diversification through mergers and acquisitions (M&As) on the firm's risk–return profile. We identify the rewards from different types of M&As and investigate whether becoming a global firm is a value-enhancing strategy. Drawing on the theoretical work of Vachani (Journal of International Business Studies, 22 (1991), pp. 307−222) and on Rugman and Verbeke's (Journal of International Business Studies, 35 (2004), pp. 3−18) metrics, we classify firms according to their degree of international and product diversification. To account for the endogeneity of M&As, we develop a panel vector autoregression. We find that global and host-region multinational enterprises benefit from cross-border M&As that reinforce their geographical footprint. Cross-industry M&As enhance the risk–return profile of home-region firms. This effect depends on the degree of product diversification. Hence there is no value-enhancing M&A strategy for home-region and bi-regional firms to become ‘truly global’.

Cross-border capital flows into real estate

This study investigates the determinants of cross-border capital flows into direct real estate markets. In particular, it investigates how existing institutional, regulatory and real estate specific barriers affect cross-border real estate inflows and outflows in a sample of 24 developed and emerging countries, and whether investors seek out targets with lower barriers and regulatory arbitrage. We do not find evidence of significant cross-border institutional or regulatory arbitrage in the real estate market. However, real estate market liquidity is found to be the most important driver of cross-border flows. While many of the institutional barriers included in this analysis do not appear to impact the level of real estate inflows significantly, their presence tends to suppress real estate capital outflows to other countries. Overall, easy access to financial markets, a good economic environment and transparent real estate markets may enhance real estate outflows, while returns and the macroeconomy are found to enhance domestic real estate investment.

Privatisation and cross-border electricity trade: from internal market to European Supergrid?

he perspective European Supergrid would consist of an integrated power system network, where electricity demands from one country could be met by generation from another country. This paper makes use of a bi-linear fixed-effects model to analyse the determinants for trading electricity across borders among 34 countries connected by the European Supergrid. The key question that this paper aims to address is the extent to which the privatisation of European electricity markets has brought about higher cross-border trade of electricity. The analysis makes use of distance, price ratios, gate closure times, size of peaks and aggregate demand as standard determinants. Controlling for other standard determinants, it is concluded that privatisation in most cases led to higher power exchange and that the benefits are more significant where privatisation measures have been in place for a longer period.

The persistence of distance: a gravity model of European cross-border real estate development flows

Purpose – This paper aims to investigate the scale and drivers of cross-border real estate development in Western Europe and Central and Eastern Europe. Design/methodology/approach – Placing cross-border real estate development within the framework of foreign direct investment (FDI), conceptual complexities in characterizing the notional real estate developer are emphasized. Drawing upon a transaction database, this paper proxies cross-border real estate development flows with asset sales by developers. Findings – Much higher levels of market penetration by international real estate developers are found in the less mature markets of Central and Eastern Europe. Analysis suggests a complex range of determinants with physical distance remaining a consistent barrier to cross-border development flows. Originality/value – This analysis adds significant value in terms of understanding cross-border real estate development flows. In this study, a detailed examination of the issues based on a rigorous empirical analysis through gravity modelling is offered. The gravity framework is one of the most confirmed empirical regularities in international economics and commonly applied to trade, FDI, migration, foreign portfolio investment inter alia. This paper assesses the extent to which it provides useful insights into the pattern of cross-border real estate development flows.

The impact of cross-border real estate investment on commercial real estate capitalisation rates

This study examines the impact of foreign real estate investment on the US office market capitalization rates. The geographic unit of analysis is MSA and the time period is 2001-2013. Drawing upon a database of commercial real estate transactions provided by Real Capital Analytics, we model the determinants of market capitalization rates with a particular focus on the significance of the proportion of market transactions involving foreign investors. We have employed several econometric techniques to explore the data, potential estimation biases, and test robustness of the results. The results suggest statistically significant effects of foreign investment across 38 US metro areas. It is estimated that, all else equal, a 100 basis points increase in foreign share of total investment in a US metropolitan office market causes about an 8 basis points decrease in the market cap rate.

An examination of cross-border strategies in banking

The paper examines the process of bank internationalisation and explores how banks become international organisations and what this involves. It also makes an assessment of the significance of their international operations and determines whether banks are truly global organisations. The empirical data are based on the 60 largest banks in the world and content analysis is used to categorise the information into the eight international strategies of Atamer, Calori, Gustavsson, and Menguzzato-Boulard [Internationalisation strategies. In R. Calori, T. Atamer, & P. Nunes (Eds.), The dynamics of international competition – from practice to theory, strategy series (pp. 162–206). London: Sage (2000)] and Bryan, Fraser, Oppenheim, and Rall [Race for the World strategies to build a great global firm. Boston, MA: Harvard Business School Press (1999)]. The findings suggest that the majority of banks focus on countries or geographic regions in which they have some sort of cultural or economic affinity. Moreover, apart from a relatively small number of very large banks, they are international rather than truly global organisations.

Competition and cooperation between international courts: a critical approach to the new paradigms of cross-border dispute resolution model

This article examines the arising cross-border dispute resolution models (Cooperation and Competition among national Courts) from a critical perspective. Although they have been conceived to surpass the ordinary solution of a Modern paradigm (exclusive jurisdiction, choice of court, lis pendens, forum non conveniens, among others), they are insufficient to deal with problems raised with present globalization, as they do not abandon aspects of that paradigm, namely, (i) statebased Law; and (ii) standardization of cultural issues.

Cross-border reverse takeover: o caso das multinacionais brasileiras

O Cross-border reverse takeover, conduzido pelas multinacionais brasileiras, gerou desempenho superior? Cross-border reverse takeover tem sido a expressão usada para designar a aquisição de empresas em países desenvolvidos por empresas de países em desenvolvimento. Essas aquisições, reversas porque invertem o fluxo tradicional dos investimentos internacionais, respondem atualmente por parcela significativa desses investimentos e colocam em cheque a forma tradicional de pensar os negócios internacionais. Meu argumento é que as empresas que fizeram aquisições em países desenvolvidos passam a ter acesso aos recursos não disponíveis no país de origem, tais como novas tecnologias, técnicas de gestão mais avançadas, mercado de capitais mais desenvolvidos, recursos financeiros de baixo custo, entre outros. Por outro lado, elas já desenvolveram competências para gerir esses recursos e passam a ter vantagem competitiva sobre os competidores locais, levando ao desempenho superior. No entanto, partindo dos dados da base de dados Thomson ONE, que registra todas as fusões e aquisições anunciadas, oncluídas ou não, e empregando as metodologias de estudos de evento e de regressões multivariadas, com base em dados contábeis sobre uma amostra de empresas brasileiras listadas em bolsa de valores, esta tese demonstra que estatisticamente não é possível afirmar que essas empresas obtiveram desempenho superior.

International commercial banks and their cross-border lending to governments of developing countries: a study of Peru, 1965-1976: preliminary version

Includes bibliography

The special rights other than shares in cross-border mergers of limited liability companies within the European Union. A perspective from the Spanish Law

The present research aims to study the special rights other than shares in Spanish Law and the protection of their holders in cross-border mergers of limited liability companies within the European Union frame. Special rights other than shares are recognised as an independent legal category within legal systems of some EU Member States, such as Germany or Spain, through the implementation of the Third Directive 78/855/CEE concerning mergers of public limited liability companies. The above-cited Directive contains a special regime of protection for the holders of securities, other than shares, to which special rights are attached, consisting of being given rights in the acquiring company, at least equivalent to those they possessed in the company being acquired. This safeguard is to highlight the intimate connection between this type of rights and the company whose extinction determines the existence of those. Pursuant to the Directive 2005/56/CE on cross-border mergers of limited liability companies, each company taking part in these operations shall comply with the safeguards of members and third parties provided in their respective national law to which is subject. In this regard, the protection for holders of special rights other than shares shall be ruled by the domestic M&A regime. As far as Spanish Law are concerned, holders of these special rights are recognized a right of merger information, in the same terms as shareholders, as well as equal rights in the company resulting from the cross-border merger. However, these measures are not enough guarantee for a suitable protection, thus considering those holders of special rights as special creditors, sometimes it will be necessary to go to the general protection regime for creditors. In Spanish Law, it would involve the recognition of right to the merger opposition, whose exercise would prevent the operation was completed until ensuring equal rights.

Cross-Border Banking

Der aktuelle Band der Reihe «Schweizerische Bankrechtstagung», befasst sich vertieft mit dem Thema des «Cross-Border Banking». Im Zentrum der Tagung vom Februar 2009 in Bern standen dabei weniger die Politik als vielmehr das Recht und praktische Fragen, die sich im Zusammenhang mit dem grenzüberschreitenden Bankverkehr stellen. Die Themen: Amtshilfe und Rechtshilfe – Neue Entwicklungen, Euro-Zahlungen gemäss den SEPA-Rulebooks (insbesondere die Haftung der Banken), Rechtliche Risiken im grenzüberschreitenden Verkehr, Aufsicht über international tätige Finanzgruppen – Konsequenzen für die Bank, Praktische Fragen der Vorort-Kontrolle, Die Standards zur Aufhebung des Bankgeheimnisses, Die Verletzung des Bankgeheimnisses – Individual- und Unternehmensstrafrecht.