Exam Questions (50% each)
1) Gili, a Chinese car maker, is spending a very large amount of money buying another foreign car producer.  According to the theories in this course, do you think this is a good deal?
   
Take Chinese  Geely close to Volvo  acquisition for example,  I don't believe it's in the best  interest for Chinese carmakers.Chinese carmaker Geely is said to be in the final spurt to acquire Sweden -based Volvo Cars from Ford-but analysts are already criticizing the deal.
1. 吉利 沃尔沃Mergers and acquisitions (abbreviated M&A) is an aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture. The distinction between a "merger" and an "acqui
sition" has become increasingly blurred in various respects (particularly in terms of the ultimate economic outcome), although it has not completely disappeared in all situations.
Firstly, the acquisition  extend the transaction cost.In economics and related disciplines, a transaction cost is a cost incurred in making an economics exchange or the cost of participating in a market.
A number of kinds of transaction cost have come to be known by particular names:
∙ 埃尔法 汽车 美利达公爵300>东风悦达起亚k3报价Search and information costs are costs such as those incurred in determining that the required good is available on the market, which has the lowest price, etc. For
∙ Bargaining costs are the costs required to come to an acceptable agreement with the other party to the transaction, drawing up an appropriate contract and so on. In game theory this is analyzed for instance in the game of chicken.  On asset markets and in market microstructure,  the transaction cost is some function of the distance between the bid and ask. 小幻影
∙ Policing and enforcement costs are the costs of making sure the other party sticks to the terms of the contract, and taking appropriate action  if this turns out not to be the case.
2.Asset specificity is a term related to the inter-party relationships of a transaction. It is usually defined as the extent to which the investments made to support a particular transaction have a higher value to that transaction than they would have if they were redeployed for any other purpose. Asset specificity has been extensively studied in a variety of management and nissan livinaeconomics areas such as marketing, accounting, organizational behavior and management information systems.
Multidimensionality
Scholars have acknowledged the multidimensional property of asset specificity. For example, Williamson (1983) identified four dimensions of asset specificity:
∙ Site specificity, e.g. a natural resource available at a certain location and movable only at great cost;
∙ Physical asset specificity, e.g. a specialized machine tool or complex computer system designed for a single purpose;
∙ Human asset specificity, i.e., highly specialized human skills, arising in a learning by doing fashion; and
∙ Dedicated assets, i.e. a discrete investment in a plant that cannot readily be put to work for other purposes.
Malone et al. (1987) made an important addition to the above list:
∙ Time specificity, an asset is time specific if its value is highly dependent on its reaching the user within a specified, relatively limited period of time.
Joskow (1988) pointed out that these different categories point to essentially the same phenomenon, but that it is instructive in empirical analyses to treat each category distinctly. Joskow's series of papers have looked at contract structuring in order to examine how contracts mitigate transaction costs inherent in a market based relationship
Zaheer and Venkatraman (1994) acknowledge four asset specificity dimensions: site, human, physical, and dedicated assets. In addition, they define two dimensions of asset specificity in their study: human asset specificity and the newly-developed "procedural asset specificity", where
∙ Human asset specificity deals with the degree to which skills, knowledge and experience of the agency's personnel are specific to the business process.
∙ Procedural asset specificity incorporates notions of human asset specificity and refers to the degree that an agency's workflows and processes are customized to exploit the other party's capabilities.
Most theoretical work focus on the relationships between asset specificity and sunk cost effects, transaction costs, vertical integration, and uncertainties.
3.Compare with outsourcing