Location Choices of Multinational Firms: The Case of Mergers and Acquisitions
AbstractThis article examines the location choices of cross-border Mergers and Acquisitions (M&A) between OECD members' firms in the 1990's. In addition to traditional determinants of FDI, we estimate the impact of specific factors affecting the M&A location pattern. Two distinct econometric methods are implemented: the conditional logit and the count model. We find that the supply of target firms constrains the location of M&A. However, it is not the only determinant of location: the market size, the labor cost, the market access and the financial openness play a positive and significant role in the M&A location. A bandwagon effect is also observed. In the opposite, the corporate tax rate and the productivity decrease the probability to attract M&A. Cultural and geographic distances as well as differences in legal rules exert a negative significant impact on M&A strategies too. Only the ownership structure has contrasted results.
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Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 22 (2007)
Issue (Month): ()
Foreign Direct Investment; Merger and Acquisition; Location; Conditional Logit; Count Model;
Other versions of this item:
- Zitouna, Habib & Mucchielli, Jean-Louis & Bertrand, Olivier, 2004. "Location Choices of Multinational Firms : The Case of Mergers and Acquisitions," HWWA Discussion Papers 274, Hamburg Institute of International Economics (HWWA).
- Olivier Bertrand & Jean-Louis Mucchielli & Habib Zitouna, 2004. "Location Choices Of Multinational Firms: The Case Of Mergers And Acquisitions," Royal Economic Society Annual Conference 2004 124, Royal Economic Society.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
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