Do All Networks Facilitate International Commerce? The Case of Us Law Firms and the Mergers and Acquisitions Wave of the Late 1990s

CIES Discussion Paper No. 0146

30 Pages Posted: 12 Dec 2001

See all articles by Simon J. Evenett

Simon J. Evenett

University of Oxford - Said Business School; Centre for Economic Policy Research (CEPR)

Date Written: December 10, 2001

Abstract

Unlike prior research, which has tended to focus on the effects of business networks on the international flow of goods and services, this paper examines the extent to which the international presence of US law firms stimulated or retarded overseas mergers and acquisitions (M&A) activity by American corporations in 1999. In a world of merger notification requirements and reviews, these law firms can help clients overcome regulatory hurdles abroad, adding grease to the international market for corporate assets. These law firms can also oppose transactions that are inimical to their US clients' interests, throwing sand into the wheels of this form of international commerce. Evidence is presented here to suggest that the US law firm with the greatest global reach (Baker & McKenzie) has facilitated such commerce, whereas the combined effect of five smaller US law firms with considerable global footprints appears to have reduced US outward M&A in 1999. The geographical distribution of these six law firms' offices around the world is such that, on net, many non-G7 nations have experienced US M&A transactions that are larger in total value and in average size that had those law firms not operated in these jurisdictions. This, in turn, suggests that these nations' own firms are now more exposed to pressures from the international market for corporate control. A byproduct of this study is the potentially provocative finding that the presence of national merger review procedures abroad tends to cut in half the amount of overseas M&A undertaken by US corporations.

Suggested Citation

Evenett, Simon J., Do All Networks Facilitate International Commerce? The Case of Us Law Firms and the Mergers and Acquisitions Wave of the Late 1990s (December 10, 2001). CIES Discussion Paper No. 0146. Available at SSRN: https://ssrn.com/abstract=293804 or http://dx.doi.org/10.2139/ssrn.293804

Simon J. Evenett (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
44 1865 288 875 (Phone)
44 1865 288 805 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
254
Abstract Views
2,269
rank
121,285
PlumX Metrics