The Futility of Walls: How Traveling Corporations Threaten State Sovereignty

Inversions--mergers in which one firm merges with another abroad to avoid taxes in its home country--have spread as globalization has reduced many of the transactional costs associated with relocating. As firms acquire the power to choose the laws that govern them, they challenge the sovereignty of nation-states, who find their ability to tax and regulate firms depleted. States and firms compete in a game of cat and mouse to adapt to this new global reality. The subversion of state power by these firms reveals the futility of walls, both literal and regulatory. This Essay describes the phenomenon of these “traveling corporations” and analyzes several remedies that could limit future mergers. We conclude by arguing that inversions provoke deglobalization and yet may continue to flourish despite it as firms take the lead in dictating global norms

The free cash flow theory of takeovers: a financial perspective on mergers and acquisitions and the economy

Consolidation and merger of corporations ; Stock market ; Corporations ; Cash flow

Merger and Acquisition Activities in Japan: the Present and the Future

Merger and acquisition are expected to generate increasing interest in industrial circles throughout Japan. Those who argue in favor of mergers and acquisitions emphasize that these activities will help rejuvenate the economy of Japan through the revitalization of corporate management and the efficient reallocation of resources. Some commentators are strongly in favor of takeover bids and argue that aggressive takeover bids will lead to the revitalization of the individual corporations targeted for acquisition through the arousal of top officials of the targets. Critics charge, on the other hand, that only raiders, lawyers and speculators find takeover bids profitable. Some complain that raiders purchase equity shares of a corporation simply to run up the share price and make money. They menace the target corporation with a possible acquisition and then attempt to reap large profits by forcing the target to buy back the shares at a higher price. This scenario does nothing for the future of the corporation or the economy as a whole. Because monetary relaxation has prevailed in Japan for the past five years, some corporations have been engrossed in what some call a money game and have managed their surplus funds in money markets in an effort to build up financial assets. There is a consensus in the financial circles of Japan that every effort must be made to prevent this money game from making further progress and that what might be called a casino society should be prevented from taking root in Japan as it has in the United States. Industrial circles in Japan are ready to welcome merger and acquisition activities in general from a constructive point of view, though they rightly fear the effects of excess speculation

Competition Law Enforcement in China: Between Technocracy and Industrial Policy

The article provides a rare reconstruction of a number of early cases decided under the Chinese Anti-Monopoly Law. In particular, the article seeks to go behind the published decisions of the responsible authorities, to reconstruct their decision-making process in particular by identifying the sources of consultation and the arguments that various stakeholders presented to the authorities about what course of action to follow