“In 2010 emerging-market firms accounted for a third of the world’s $2.4tr tally of mergers and acquisitions”. This week’s Economist argues that the UK is well placed to continue to attract disproportionate levels of investment from emerging-market multinationals:
- Our open economy makes it much easier for multinationals like India’s Tata and Mexico’s Cemex to take over a British company than an American one. And we are relatively welcoming to inward investors (compared, for example, to the French)
- Britain’s commercial and imperial past means that we have plenty of international brands which are attractive to firms. Many of them harbour sophisticated technologies which emerging-market multinationals lack
- Once here, emerging-market multinationals can easily access world class services like accountancy, legal advice and branding
The Economist also identifies the benefits to Britain:
- Headquarters tend to remain in the UK
- Injections of foreign cash beats spending British cash propping up ‘national champions
- Foreign-owned factories in Britain “tend to be more productive than indigenous enterprises”.