We examine whether higher productivity of a foreign firm increases the incentive for a cross border merger, which is a dominant form of foreign direct investment in recent decades. In line with the empirical evidence, we show that the relationship between productivity of a foreign firm and cross border merger is mixed. We show that the market concentration effect plays an important role in determining the relationship and provides a rationale for a generally ignored empirical evidence showing a negative relationship between firm-productivity and cross border merger. Our results hold under both Cournot and Bertrand competition.

中文翻译：

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企业生产力和跨国并购

我们研究了外国公司更高的生产力是否会增加跨境并购的动机，跨境并购是近几十年来外国直接投资的主要形式。与经验证据一致，我们表明外国公司的生产力与跨国并购之间的关系是混合的。我们表明，市场集中效应在确定这种关系中起着重要作用，并为普遍被忽视的经验证据表明公司生产力与跨国并购之间存在负相关关系提供了理论依据。我们的结果在古诺和伯特兰竞争下都成立。