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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
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    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Research in International Business and Finance.

    Volume (Year): 30 (2014)
    Issue (Month): C ()
    Pages: 202-216

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    Handle: RePEc:eee:riibaf:v:30:y:2014:i:c:p:202-216

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    Web page: http://www.elsevier.com/locate/ribaf

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    Keywords: Cross-border; Mergers and acquisitions; Macroeconomic factors; VAR/VECM; UK;

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