M&As AND THE GLOBAL STRATEGIES OF TNCs

Abstract

MOST of the motivations for M&As that feature in the global strategies of transnational corporations (TNCs) are a means of reshaping competitive advantages within their respective industries. They have some effect on the TNCs of all or most industries and so to that extent they are not necessarily sector-specific. However, it may be that some of the motives which we outline affect some industries more than others, and in that sense they can be expected to be associated with a greater intensity of M&As in certain sectors than others. We identify the likelihood of M&As across industries, and discuss how the general factors that have promoted the recent M&A wave have had a bigger impact on the global strategies of TNCs in the industries in which the propensity to engage in M&As has been the highest. The regional dimension is also considered.

Multinational investments across Europe: a multilevel analysis

“…Therefore, greenfield FDI can be attractive when firm-specific technological and organisational competences define a firm's ability to compete on the market, since the company has the possibility to duplicate (parts of) their know-how, their routines, and the physical property (Hennart and Park 1993) across locations. If a company, instead, aims at (immediate) access to the technologies and the local market experience of a target firm, a takeover can be preferable (Ó hUallacháin and Reid 1997;Cantwell and Santangelo 2002). M&A projects, therefore, seem to be a less risky entry mode compared to greenfield investment.…”

The Geography of Host Country Knowledge Sourcing and Subsidiary Innovation Performance

“…Like other industrial firms, foreign subsidiaries are more familiar with the development of applied knowledge, which they have a greater understanding of and have eventually to protect from spillovers to their peers (Cantwell and Santangelo 2002;Narula and Santangelo 2009). Familiarity with the sourced knowledge facilitates absorptive capacity because it creates a common cognitive background (Cohen and Levinthal 1990), but at the same time it may favor redundancy as it limits access to diverse ideas and expertise (Noteboom 2000).…”

“…Yet, geographically close companies are likely to develop very similar familiar knowledge outputs and, hence, the knowledge sourced by proximate peers may be redundant (McFadyen and Cannella 2005). In addition, proximity may favor unintended knowledge spillovers to the nearby firms (Cantwell and Santangelo, 2002) and, hence, the innovation performance of each firm is not different from that of the nearby peers (Lahiri 2010(Lahiri , 2015. The knowledge sourced from proximate firms may also not be of high quality due to the adverse selection of less innovative firms in agglomerations (Alcacer 2006).…”

Onions, Shallots and Garlic

“…Garlic which is to be marketed in strings needs to retain its foliage for plaiting. In California, most garlic for the dehydration industry is harvested mechanically, topped and conveyed in bulk onto trucks for transport to the factory (Cantwell 2002). Böttcher (1999), in Germany, established that the best time to harvest garlic for optimal storage quality was when 30-70% of the leaves were dried.…”