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 membersÂ´ 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 (Poisson or negative binomial model). In spite of the use of alternative econometric methods, we find that the supply of target firms (captured by market capitalization and privatization activity) constrains the location of M&A. However, is it not the only determinant of location: market size, labor costs, market access and financial openness play a positive and significant role on 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 and differences in legal rules also exert a negative significant impact on M&A strategies. Only the ownership structure has contrasted results. --
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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2004 with number 124.
Date of creation: 17 Sep 2004
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Other versions of this item:
- Bertrand, Olivier & Mucchielli , Jean-Louis, 2007. "Location Choices of Multinational Firms: The Case of Mergers and Acquisitions," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 181-209.
- 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).
- R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-09-30 (All new papers)
- NEP-COM-2004-09-30 (Industrial Competition)
- NEP-URE-2004-09-30 (Urban & Real Estate Economics)
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