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In a global world one thing you always have to keep in mind is that companies, as they become successful, can simply relocate to where the best opportunities ar
by TangoTrotFox 8y ago
In a global world one thing you always have to keep in mind is that companies, as they become successful, can simply relocate to where the best opportunities are. And opportunity is going to encompass a wide array of things such as minimal tax obligations, minimal regulations, maximal funding, maximal talent availability, minimal talent costs, so forth and so on. You can weight all of those in some way or another and come up with n. Without some notion of nationalism, which the EU is rather less than interested in fostering, a company working in their best interest is simply going to relocate wherever n is maximized at the earliest opportunity.
And then there's also the issue of mergers and acquisitions. Imagine some country goes out of their way, likely at great cost and rule 'flexibility', and helps foster a new tech company. Then e.g. Facebook perceives this company as a potential threat and initiate their borg routine -- you will be assimilated. Fortunately in this case that just translates to throwing a ludicrous amount of money at the founders and then scrapping the company, marking it up as an acquihire. The taxpayer in whichever EU nation is probably not going to be terribly thrilled about their money being used to achieve little more than turning Facebook into even more of a behemoth.
- raesene9 8y agoBut countries can, and do, overrule "global" corporates on a regular basis. For example the USA blocks M&A activity relating to Chinese companies taking over strategic US companies. Will those US companies simply relocate to China to get round this, I doubt it. There is realistically a balance to be had between enabling global commerce and protecting national interests. At the moment the EU seems keen to move that balance more in the direction of their regional interests, no doubt partially related to the current trend for more national interest based policies from the US
- jacobush 8y agoThat's because China just isn't good enough for these corporations. If it were, they'd go there faster than you could say "quarterly report".
- adventured 8y agoThat used to be true. The US switched to taking an aggressive captivity approach to its strategically important corporations. That changed when Pfizer tried to flee to Ireland in an inversion due to high corporate tax rates.[1] Apple, Cisco, Intel, Microsoft, Google, Walmart, Pfizer, Amazon, Amgen, Merck, Facebook, Qualcomm, AT&T, Verizon, JP Morgan, Bank of America, Wells Fargo, Citigroup, Exxon, Chevron, Berkshire Hathaway, Visa, GM, Ford, Disney, Comcast, Procter & Gamble, etc. If any of those companies attempted to leave the US as their corporate domicile (whether to Canada, Ireland, Mexico, Japan, or China), they would likely be blocked by the Treasury. They'll change whatever rules are necessary to maximize the pain. There are a few exceptions to allowing companies to leave. Germany for example, via Bayer, was allowed to buy Monsanto - which is a strategically important corporation - because they're an ally and it's expected that when the US wants to buy an EU company there will be reciprocity (eg the failed NXP Semiconductor acquisition). Smaller companies may slip under the acquisition restrictions for countries not named China (or Russia). For example AMD would be allowed to be acquired by a tech company from Canada or Britain. Celgene or Regeneron would be allowed to be purchased by Takeda Pharma. [1] https://www.washingtonpost.com/business/economy/pfizer-allergan-call-off-160-billion-merger-after-us-moves-to-block-inversions/2016/04/06/4fd55446-fc11-11e5-80e4-c381214de1a3_story.html https://www.washingtonpost.com/business/economy/pfizer-aller...