In contrast to empirical evidence, recent theories of cross-border mergers and acquisitions (M&As) assume perfect knowledge transfers - from high to low productivity firms - between acquirer and target. Using the Melitz (2003) model of heterogeneous firms, we develop a matching model of...

In this article, we investigate whether environmental capabilities influence firms’ corporate strategies, a topic that has received little attention to date. We hypothesize that firms are more likely to acquire facilities when ownership facilitates the transfer of capabilities either to or...