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Home country macroeconomic factors on outward cross-border mergers and acquisitions: Evidence from the UK

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  • Boateng, Agyenim
  • Hua, Xiuping
  • Uddin, Moshfique
  • Du, Min

Abstract

In this paper, we examine the dynamic effects of key macroeconomic factors on the UK crossborder mergers and acquisitions (CBM&A) outflows over the period 1987–2008. Using a seven variable vector autoregressive/vector error correction models (VAR/VECM), the study finds that a number of home country macroeconomic variables, including GDP, broad money supply, stock prices and real effective exchange rate exert a positive and significant influence in explaining the CBM&A outflows by the UK firms. However, inflation rates and interest rates tend to have a negative impact on the volume of CBM&A. The findings support the notion that home country macroeconomic factors can create advantages to improve the outward Cross-border M&A activities.

Suggested Citation

  • Boateng, Agyenim & Hua, Xiuping & Uddin, Moshfique & Du, Min, 2014. "Home country macroeconomic factors on outward cross-border mergers and acquisitions: Evidence from the UK," Research in International Business and Finance, Elsevier, vol. 30(C), pages 202-216.
    • Handle: RePEc:eee:riibaf:v:30:y:2014:i:c:p:202-216
    DOI: 10.1016/j.ribaf.2013.08.001
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    7. Xie, En & Reddy, K.S. & Liang, Jie, 2017. "Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions," Journal of World Business, Elsevier, vol. 52(2), pages 127-183.
    8. Reddy, Kotapati Srinivasa, 2015. "Macroeconomic Change, and Cross-border Mergers and Acquisitions: The Indian Experience, 1991-2010," MPRA Paper 63562, University Library of Munich, Germany, revised 2015.
    9. Kumar, Deepak & Sengupta, Keya & Bhattacharya, Mousumi, 2023. "Macroeconomic influences on M&A deal outcomes: An analysis of domestic and cross-border M&As in developed and emerging economies," Journal of Business Research, Elsevier, vol. 161(C).
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