The Determinants of Cross-border M&As : the Role of Institutions and Financial Development in Gravity Model
AbstractThis paper examines the macroeconomic determinants of cross border M&As. Using a panel data set of bilateral M&A deal values for 101 countries and 17 years ranging from 1989 to 2005, we investigate both home and host country factors that may play an important role in determining the size and direction of M&A flows. Overall, the empirical results suggest that legal and institutional quality and financial market development increase M&A volume across countries. The significant effect of institutions however, may disappear for transactions between countries of the similar stage of the development.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Finance Working Papers with number 21934.
Date of creation: Nov 2007
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Cross-border M&A; Quality of Institutions; Financial Market Development; economic integration; Tobit Model;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
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