Economics: Analysis of Cross-Border Mergers and Acquisitions and Comparison of Indian and Chinese Economies

Economics 1
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Economics 2
Q3
Mergers and acquisitions (MAs)
Mergers and acquisitions (MAs) have remained time remained a popular strategy for
firms and signified a vital alternative for strategic expansion. Globalisation and technological
development have vastly added to the popularity of MAs and cross-border MAs. In 1990 (the
alleged fifth merger wave), the prevalence of this stratagem increased enormously. Acquisitions
completed in 1997 alone were priced at more than all acquisitions for the period of the 1980s
(Bebenroth 2015, pg. 67). The worldwide MAs activity in 1998 equalled over US$2.1 trillion in
terms of the stock worth of the transactions publicised (Soofi and Zhang 2018, pg.91). Besides,
the total value of deals finalized between 1998 and 2000 was approximately US$4.3 trillion,
which is over the total amount of all transactions done during the previous 30 years (Bertrand et
al. 2016 pg. 103). And, whereas the general MA market follows a cyclical nature, and has cooled
since the prime of the late 1990s, the entire number of global MAs has been growing recently at
a fast rate. While there is extensive research in the field, it is inopportunely disjointed, leaving
gaps that must be addressed. Herein, we analyze the factors that determine the effectiveness of
cross border MAs by firms.
The effectiveness of cross border MAs is influenced by many aspects. In this paper, five
elements that ought to be given a great emphasis by firms when introducing and executing cross-
border MAs. These consist of good management, business policies, taxation, cultural integration,
general business environments in the country. These factors are each discussed comprehensively
in the next section.

Economics 3
Good Management
Just like every business activity, cross border MAs necessitate that they are completed with
apposite methods of management in each and every feature of the concerned business. Some of
the crucial leadership and management aspects that necessitate eagerness in their treatment
comprise product development and integration, market analysis and human resource aspects.
According to Lin, Officer and Shen (2013, pg. 67), good administration should comprise the
features of human resource. Cross-Border MA mainly relies on human capital if continuous
success is to be achieved. Human capital facets directly give an idea of workers who are in
employment by the concerned entities. There is each time the matter of job safety that emerges
when cross border MAs arise. Frequently, workers develop the perception that they ought to
have their involvement in the companies that are merging, however candid or idealistic they may
be. Such workers perceptions usually hurt their productivity, and failure gets directly connected
to human capital management.
Product integration and development is another topic of concern when dealing with the
matter of good governance in cross-border MAs. Rationally, the engaged business in a cross-
border MAs activity has the exceptional merchandises that they produce or supply (Johanson and
Vahlne 2017, pg.13). When these kind of companies merge, they successfully develop into a
single business, and in such an instance, the products ought to be integrated in a manner that
reflects cross-border MA exercise was completed. Developing a product and integrating it is one
of the most thought-provoking responsibilities in cross border MAs. Thus, it demands for highest
eagerness when trying to rationalize all the thorny issues that are regularly experienced during
the product development process. Eventually, it is only through good governance that a
sustainable product integration and development can be reached in cross-border MAs.

Economics 4
Cultural Integration
Culture integration has always been a very complex topic in cross-border MAs.
Committing to cross border MAs activity without completely integrating these conflicting views
on organization culture is a big blunder of dire ramifications that any involved company would
make (Johanson and Vahlne 2017, pg. 101). Any business at all times has its philosophy from
which all its objectives and strategic decisions emanates from. As a result, it might be quite an
overwhelming undertaking attempting to have the cross border companies to pull out their values
owing to the fact that nearly everything in relation to administration will remain undamaged
notwithstanding the MAs exercise. The crew set for cultural integration exercise in cross border
Mas is expected to ensure that new organization culture that is to be developed is inclusive of all
the characteristics as earlier held by the practices of the concerned companies businesses
(Bertrand 2016, pg. 56). This is undoubtedly a tough assignment, however the concerned
businesses are required to do everything in their control to warrant that single but operative
organizational culture is embraced. This consequently helps the new business to achieve its goals
in keeping with terms and conditions of the mergers or acquisitions.
Business Strategies
Every state has its business strategies. These rules many times reveal how any entity
should operate while in a particular area. According to Degbey and Ellis (2016, pg.34), systems
determine how productive or unproductive business grow into in the markets of such countries.
As soon as a firm amalgamates with another, there is a higher likelihood that marketplace rivalry
for supply of a particular product to the consumers eventually stops to exist. With no rivalry in
the marketplace, the new firms mutates to a monopoly type of business and this drastically