Cross-border mergers and acquisitions in East Asia: Trends and implications

A. Mody, S. Negishi

Research output: Contribution to specialist publicationArticle

24 Scopus citations


Cross-border mergers-and-acquisitions activity is still in an early phase in East Asia's financially distressed economies and remains small, relative to their sizes and stages of development. (For example, in 1999, cross-border M and A accounted for 0.9 percent of GDP in East Asia, compared with 1.8 percent of GDP in Latin America.) The recent upsurge in mergers and acquisitions in East Asia, particularly in Korea, can be attributed largely to policy changes that have facilitated foreign acquisitions of local assets. Liberalization of foreign entry and ownership restrictions and the introduction of international accounting standards and shareholding systems have exponentially increased foreign investors' access to local markets and their ability to acquire assets within them. The most significant role for cross-border mergers and acquisitions is in encouraging longer-term reforms, such as operational restructuring and reallocation of assets, in firms. Foreign participation through M and A could also be more effective in improving efficiency, competitiveness, and corporate governance (see UNCTAD, 2000). Under the circumstances, foreign direct investment, in the form of cross-border mergers and acquisitions, has a significant role to play in the restructuring and continued development of financially distressed East Asian economies.

Original languageEnglish (US)
Number of pages4
Specialist publicationFinance and Development
StatePublished - 2001

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Development
  • Finance


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