3616_Week12_CWEE - WTO members 18-1 FINS3616 International...

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18-1 WTO members
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18-2 FINS3616 International Business Finance Week 12 Lecturer: Claudia Wee
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18-3 Chapter 18 Corporate Governance and the International Market for Corporate Control Learning objectives P National systems of corporate governance P The international market for corporate control – M&A activity – Privatizations P The international evidence on M&A – The winners and losers – Executive turnover and firm performance Butler / Multinational Finance Chapter 18 Corporate governance & the international market for corporate control
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18-4 Corporate governance Ø Corporate governance refers to the way in which stakeholders exert control over the corporation - Stakeholders – Those with an interest in the firm. A narrow definition includes the corporation’s debt and equity holders. A broader definition include labor, management, and perhaps other interested parties, such as customers, suppliers, and society at large. Ø Investment-based ways to obtain control over another firm s assets include… Acquisition of stock Acquisition of assets Merger or consolidation Joint venture or strategic alliance Joint venture – An agreement of 2 or more companies to pool their resources to execute a well-defined mission. Resource commitments, responsibilities, and earnings are shared according to a predetermined contractual formula. The MNC must protect its competitive advantages . Strategic alliance – A collaborative agreement between 2 companies designed to achieve some strategic goal. Ø Cross-border mergers and acquisitions are becoming increasingly important Ø Notes: - Foreign direct investment (FDI) may be preferred when the MNC owns production technologies that do not exist in the foreign market. - Foreign acquisition may be preferred when it costs less to acquire companies than to build the assets from scratch. National corporate governance systems Commercial banking in the United States Universal banking in Germany Japan s keiretsu system Corporate governance systems The international market for corporate control The international evidence on M&A Butler / Multinational Finance Chapter 18 Corporate governance & the international market for corporate control
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18-5 International joint ventures Mergers and acquisitions FDI: plant expansions FDI: new investment Butler / Multinational Finance Chapter 18 Corporate governance & the international market for corporate control Investment-based market entry National corporate governance systems Commercial banking in the United States Universal banking in Germany Japan s keiretsu system Corporate governance systems The international market for corporate control The international evidence on M&A
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18-6 Some Benefits of M&A Ø Cross-border M&A derive their value from more efficient utilization of the competitive advantages of the acquiring or acquired firm. Ø
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This note was uploaded on 01/10/2012 for the course FINS 3616 taught by Professor Curry during the Three '10 term at University of New South Wales.

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3616_Week12_CWEE - WTO members 18-1 FINS3616 International...

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