emerging markets finance

Abstract

Emerging countries have become more and more important in today’s economy, especially in cross-border M&As. The neoclassical theory predicts that, on net, capital should flow from countries that are capital-abundant to countries that are capital-scarce. Yet increasingly emerging market firms are acquiring assets in developed countries mainly because of their strong power and richness in commodities. As the drivers and value creation of M&A deals may differ from one industry to another, this paper proposes general guidelines for understanding the underlying factors influencing operational, political and evaluation risk in emerging markets deals