Balancing Power without Weapons: State Intervention into Cross-Border Mergers and Acquisitions
by Ashley Thomas Lenihan (Author)

About the Author
Ashley Thomas Lenihan is a Fellow at the Centre for International Studies at the London School of Economics and Political Science, a Senior Fellow at the Institute for Law, Science, and Global Security at Georgetown University, and a Term Member of the Council on Foreign Relations. Her research focuses on the relationship between state power and foreign direct investment from an international relations perspective.

About this book
Why do states block some foreign direct investment on national security grounds even when it originates from within their own security community? Government intervention into foreign takeovers of domestic companies is on the rise, and many observers find it surprising that states engage in such behaviour not only against their strategic and military competitors, but also against their closest allies. Ashley Lenihan argues that such puzzling behaviour can be explained by recognizing that states use intervention into cross-border mergers and acquisitions as a tool of statecraft to internally balance the economic and military power of other states through non-military means. This book tests this theory using quantitative and qualitative analysis of transactions in the United States, Russia, China, and fifteen European Union states. It deepens our understanding of why states intervene in foreign takeovers, the relationship between interdependence and conflict, the limits of globalization, and how states are balancing power in new ways.

Brief contents
Introduction 1
    International Finance and International Security 2
    Puzzling Behavior 4
    Intervention in Empirical Context 7
    Placing the Theory behind Intervention in Context 16
    The Significance 22
1 A Theory of Non-Military Internal Balancing 31
    Introduction 31
    National Security and Foreign Takeovers 32
    Economic Interdependence and Power 38
    The Theory 40
    Methodology 55
    Conclusion 61
2 The Numbers: Assessing the Motivations Behind State Intervention into Foreign Takeovers 70
    Introduction 70
    The Variables 70
    Independent Variables 71
    Specification of the Models and Expected Results 75
    Results 78
    Conclusion 88
3 Unbounded Intervention: The State and the Blocked Deal 93
    Introduction 93
    Defining Unbounded Intervention 94
    Case Selection 97
    Case 1: PepsiCo/Danone 100
    Case 2: CNOOC/Unocal 109
    Case 3: Check Point/Sourcefire 134
    Case 4: Macquarie/PCCW 140
    Conclusion 147
4 Unbounded or Overbalancing? An Outlier Case 158
    Introduction 158
    Case 5: DPW/P&O 159
    Conclusion 185
5 Bounded Intervention: Mitigating Threats to National Security 196
    Introduction 196
    Defining Bounded Intervention 196
    Case 6: Alcatel/Lucent 216
    Case 7: Lenovo/IBM 231
    Conclusion 244
6 Non-Intervention and the “Internal” Intervention Alternative 253
    Introduction 253
    Part I: Non-Intervention 253
        Case 8: CGG/Veritas 255
        Case 9: JP Morgan/Troika Dialog 257
    Part II: Internal Intervention 267
        Case 10: GdF/Suez 271
    Conclusion 278
Conclusion 281
    The Theoretical Context 281
    Non-Military Internal Balancing 283
    Significance 284
    Concluding Thoughts 296
Appendix A Alternative Independent Variables Considered 299
Appendix B Descriptive Statistics of Variables in MNLMs I–IV 303
Appendix C MNLM III and Resource Dependency 307
Appendix D Descriptive Statistics of Dataset Variables: Frequencies 309
Appendix E Bivariate Correlations of Dataset Variables 310
Appendix F Negative Case Selection 311
References 314
Index 351

Length: 372 pages
Publisher: Cambridge University Press (May 24, 2018)
Language: English
ISBN-10: 1107181860
ISBN-13: 978-1107181861