Among the ways TNCs enter foreign markets, equity modes
(including M&As and greenfield/brownfield investments) are set to grow
in importance, according to responses to this year’s WIPS. Roughly
40 to 50 per cent of respondents remarked that these modes will be
“very” or “extremely” important for them in 2014 (figure 5). In the case of
M&As, this reflects in part the increasing availability of potential targets
around the world, especially in developing and transition economies.
This trend is likely to drive M&As in these economies in the medium
term as TNCs from both developed and developing economies seek to
fulfill their internationalization plans. Nevertheless, M&A activity will be
heavily contingent on the health of global financial markets, which could
hamper any increase in activity in the short term.