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Cross‐Border Mergers and Acquisitions: Innovative Capacity and National Economic Security

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  • Yaozhong Wang
  • Zhizhong Liu
  • Yang Zhang

Abstract

Based on capital accumulation and the capacity to innovate, we use an Edgeworth box and find that in a host country that lacks capital, if multinational corporations (MNCs) remit more profits back to their parent companies and invest less in the host country, the latter’s R&D ability to innovate may decline. As a result, the host country’s economic security could be threatened. An empirical test using Chinese data suggests that introducing foreign capital actively and promoting the innovation of small and medium‐sized enterprises could help to maintain national economic security in cross‐border M&A.

Suggested Citation

  • Yaozhong Wang & Zhizhong Liu & Yang Zhang, 2007. "Cross‐Border Mergers and Acquisitions: Innovative Capacity and National Economic Security," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 10(4), pages 263-281.
    • Handle: RePEc:taf:jecprf:v:10:y:2007:i:4:p:263-281
    DOI: 10.1080/17487870701551998
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    References listed on IDEAS

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    1. Sophia Dimelis & Helen Louri, 2002. "Foreign ownership and production efficiency: a quantile regression analysis," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 449-469, July.
    2. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    Cited by:

    1. Qiuyang Gu & Chunhua Ju & Fuguang Bao, 2020. "The Cross-Border Mergers and Acquisitions of Local State-Owned Enterprises: The Role of Home Country Government Involvement," Sustainability, MDPI, vol. 12(7), pages 1-23, April.
    2. Reddy, Kotapati Srinivasa, 2015. "Why do Cross-border Merger/Acquisition Deals become Delayed, or Unsuccessful? – A Cross-Case Analysis in the Dynamic Industries," MPRA Paper 63940, University Library of Munich, Germany, revised 2015.

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