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Cross-Border M&A Inflows and the Quality of Institutions: A Cross-Country Panel Data Analysis

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  • Jung Hur

    ()
    (Department of Economics, National University of Singapore)

  • Rasyad A. Parinduri

    ()
    (Singapore Centre for Applied and Policy Economics (SCAPE) Department of Economics, National University of Singapore)

  • Yohanes E. Riyanto

    ()
    (Department of Economics, National University of Singapore)

Abstract

This paper provides an empirical explanation to the observed disparity in cross-border M&A inflows to developing and developed countries over the last two decades. We show two main results. First, the disparity can be attributed to the difference in the quality of institutions between the two groups of countries. Second, the gain from reforming institutions in developing countries is smaller than that in developed countries. These findings suggest that, with the current speed of institutional reforms in developing countries, the disparity is likely to persist.

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Bibliographic Info

Paper provided by National University of Singapore, Department of Economics, SCAPE in its series SCAPE Policy Research Working Paper Series with number 0708.

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Length: 32 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:sca:scaewp:0708

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Web page: http://www.fas.nus.edu.sg/ecs/scape/index.html
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Keywords: cross-border M&A inflows; quality of institutions; developing and developed countries; pooled-data and panel data analysis; correlated random effects;

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  9. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73, pages 110.
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  12. Simon J. Evenett, 2003. "The Cross Border Mergers and Acquisitions Wave of the Late 1990s," NBER Working Papers 9655, National Bureau of Economic Research, Inc.
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  14. di Giovanni, Julian, 2002. "What Drives Capital Flows? The Case of Cross-Border M&A Activity and Financial Deepening," Center for International and Development Economics Research, Working Paper Series qt7nq6d7wp, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  15. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
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