When nationalism is a negative
Associate Professor Isil Erel
Was it surprising that staunch U.S. opposition to a Chinese oil company's bid to buy Unocal in 2005 ultimately nullified the purchase? Not according to research by Fisher's Isil Erel. She found that nationalistic sentiments by domestic governments can stand in the way of competition in acquisitions depending on the nationality of the acquiring company.
The study, which examined data on government reactions to individual merger attempts in 15 European Union countries from 1997 to 2006, found:
Erel's study also concluded that nationalism has helped dictate direct government action, as domestic governments have actively blocked acquisitions by supporting the creation of domestic companies too large for foreign purchase.