Cross-border M&As and innovative activity of acquiring and target firms

Abstract

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A Link Between Innovation Performance and Inward Foreign Direct Investments: A Case of Slovakia

“…Hence, it is reasonable to predict that due to transfer of proprietary assets from origin country to the host country the innovation performance of the reporting host country shall be more significantly and positively influenced by greenfield investments in comparison to M&As. This prediction can be supported by the results of the study by Stiebale (2016) that indicate a considerable increase in post-acquisition innovation in the acquirer's country, while innovation in the target's country tends to decline. The asymmetry of effects between acquiring and target firms increases with pre-acquisition differences in knowledge stocks, indicating a relocation of innovative activities towards more efficient usage within multinational firms.…”

International Taxation and M&A Prices

“…For example, Bresman et al (1999) and Bena and Li (2014) show that home investment benefits from knowledge spillovers from cross-border M&A activity. Further, M&As are found to increase productivity (e.g., Devos et al (2009)), management efficiency (e.g., Manne (1965), Wang and Xie (2009)), discipline (e.g., Sapra et al (2014), Scharfstein (1988) and innovation (e.g., Stiebale (2016)). Thus, in a mid-or long-term calculation, tax revenue losses should (at least partially) be compensated by additional tax revenue gains through increasing inbound in-vestment and increasing earnings in the residence country.…”

“…Such a strong position is in the interest of a national tax policy maker due to positive spillovers of cross-border M&A activity to the MNE's residence country (e.g., Manne (1965), Scharfstein (1988), Bresman et al (1999), Devos et al (2009), Wang and Xie (2009), Bena and Li (2014), Sapra et al (2014), Stiebale (2016)). In addition, it is in a country's interest to strengthen the position of its MNEs as buyers in cross-border M&A because the range of suitable targets is limited for operational reasons (e.g., specific intellectual property that can be acquired).…”

The Power of Cross-border M&A Promoting the Brand Upgrading of Chinese Textile and Garment Enterprises—Take AELLASSAY for a Case

“…Compared with the mid-low-end brands, high-end brands pay more attention to connotative rather than epitaxial growth, focusing on product development and design, brand awareness and value-added services [6][7]. According to the SFC "listed companies industry classification guidelines (revised in 2015)", the profits of brand channel operation and R & D design in the apparel industry chain accounted for 90%.…”