Essays on Principles of Corporate Finance - To Merge or Not to Merge Literature review

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The paper "Principles of Corporate Finance - To Merge or Not to Merge" is a perfect example of a literature review on business. Brealey and Myers (2003, p. 4) reveal that mergers have been on a dramatic increase over the past few years. There has been attributed mainly to the globalization of companies, most of which have found mergers as the best option of penetrating the international markets. In fact, currently, a day hardly passes without a newspaper headline reporting a merger between two or more companies according to Bruner (2004, p. 14).

This is understandable because globalization has become the business norm particularly for companies that want to gain a competitive advantage. A.T. Kearney noted that, despite the fact that mergers and acquisitions (M& A) activities having been associated with industrialized nations, the paradigm shift is taking effect (Kearney 2008, p. 1). In this regard, Bruner (2004, p. 21) reveals that as from 2002, merger deals between developed and third world countries have grown by 19 percent annually, which is far in excess of industrial average. This rate is also a clear indication that mergers are no longer a globalization strategy for developed countries only rather for developing countries, as well.

The research found out that companies from third-world countries such as China, India, Russia, Malaysia, South Africa, and the United Arab Emirates are seeking mergers with well-established companies in developed nations at an alarming rate. Kearney (2008, p. 1) reveals that of the 2,168 mergers and acquisitions that were registered in 2007, 421-which accounts for about 20% were driven by firms from third world countries. The research also found that the trend is growing at the rate of 26 percent per annum.

Research by Kearney (2008) found out that India is leading in cross-border mergers and acquisitions followed closely by Malaysia. This is attributed to the fact that the government of these two countries provides substantial tax incentives to companies to engage in high-tech business deals and enhance export. In contrast, Chinese companies have shied off M& A deals because of political interferences according to Wolff (2008, p. 91).  

References

Brealey, R.A., & Myers, S.C 2003, Principles of corporate finance (7th ed). Boston, MA: McGraw-Hill/Irwin.

Bruner, R.F 2004, Applied mergers, and acquisitions. Hoboken, NJ: John Wiley & Sons.

Carney W. J 2009, Mergers and acquisitions. London: Aspen Publishers Online.

DePamphilis, D 2011, Mergers, acquisitions, and other restructuring activities: an integrated approach to process, tools, cases, and solutions (7th ed). Oxford: Academic Press.

Finkelstein, S., & Cooper, C. L 2010, Advances in mergers and acquisitions, volume 8. Bingley: Emerald Group Publishing.

Gaughan, P. A 2005, Mergers: what can go wrong and how to prevent it. Hoboken, NJ: John Wiley & Sons.

Ghemawat, P., & Ghadar, F 2000, ‘The dubious logic of global megamergers’, Harvard Business Review, 78(4), 65-72.

Gitman, L.J., & McDaniel, C. D 2008, The future of business: the essentials. Manson, OH: Cengage Learning.

Harrington, D.R. 2004, Corporate Financial Analysis in a Global Environment (7th ed). Mason, OH: Thomson/South-Western.

Hoover, K 2000, "Bill Would Aid Mergers of Small Businesses." Sacramento Business Journal. July 21.

Ireland, R. D., Hitt, M. A., & Vaidyanath, D 2002, Alliance Management as a Source of Competitive Advantage. Journal of Management. 28(3), 413-446.

Kearney, A.T 2008, The rise of emerging markets in mergers and acquisitions. Developing countries gaining strength and influence. Atkearney. Pp. 1-9.

Kilpatrick, C 2000, "More owners put small businesses on the sale block." San Francisco Business Times. June 9.

Layne, S. L 2007, Mergers. Gretna: Pelican Publishing.

McGarvey, R 1997, "Merge ahead: before you go full-speed into a merger, read this." Entrepreneur. October.

Oxelman, D., Scott, G., & Stohm, P 2008, Strategic fit in mergers and acquisitions and acquisitions. A Case Study of Volvo Cars. Jonkoping International Business School, Jonkoping University. Pp. i-38.

Riley, J. (2012), “The Main Motives Behind Takeovers and Mergers.” http://www.tutor2u.net/blog/index.php/business-studies/comments/the-main-motives-behind-takeovers-and-mergers (Accessed on 28 March 2013).

Sherman, A. J 1997, Running and growing your business. New York, NY: Random House.

Wolff, L 2008, Mergers and acquisitions in China. Hong Kong: CCH Hong Kong Limited.

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