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Cross-border mergers and acquisitions in services: The role of policy and industrial structure

Author

Listed:
  • Alessandro Barattieri
  • Ingo Borchert
  • Aaditya Mattoo

Abstract

This paper explores the role of policy and economic structure in determining international mergers and acquisitions (M&A) in services sectors. The analysis is based on bilateral sectoral M&A flow data and detailed information on policy barriers from a new database. Restrictive investment policies are found to reduce the probability of M&A inflows, controlling for bilateral frictions such as geography. This negative effect, however, is mitigated in countries with relatively large shares of manufacturing and (to a lesser extent) services in GDP. The same result holds for the number of M&A deals concluded. Findings are robust to accounting for the potential endogeneity of policy restrictiveness. The evidence suggests that the impact of policy is state-dependent and related to the composition of GDP in the target economy.

Suggested Citation

  • Alessandro Barattieri & Ingo Borchert & Aaditya Mattoo, 2016. "Cross-border mergers and acquisitions in services: The role of policy and industrial structure," Canadian Journal of Economics, Canadian Economics Association, vol. 49(4), pages 1470-1501, November.
    • Handle: RePEc:cje:issued:v:49:y:2016:i:4:p:1470-1501
    DOI: 10.1111/caje.12241
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    Cited by:

    1. Samira Rousselière & Gaëlle Petit & Thomas Coisnon & Anne Musson & Damien Rousselière, 2022. "A few drinks behind—Alcohol price and income elasticities in Europe: A microeconometric note," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(1), pages 301-315, February.
    2. Tamar Khachaturian & Sarah Oliver, 2023. "Intangible trade: Understanding the relationship between trade barriers and mode of supply in services sectors," The World Economy, Wiley Blackwell, vol. 46(5), pages 1189-1234, May.
    3. Borchert, Ingo & Magdeleine, Joscelyn & Marchetti, Juan A. & Mattoo, Aaditya, 2020. "The evolution of services trade policy since the Great Recession," WTO Staff Working Papers ERSD-2020-02, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. Coisnon, Thomas & Rousselière, Damien & Rousselière, Samira, 2018. "Information on biodiversity and environmental behaviors: a European study of individual and institutional drivers to adopt sustainable gardening practices," Working Papers 272611, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    5. Fukunari Kimura & Mari Pangestu & Shandre M. Thangavelu & Christopher Findlay (ed.), 2021. "Handbook on East Asian Economic Integration," Books, Edward Elgar Publishing, number 18644, June.
    6. World Bank Group, 2017. "Investment Policy and Promotion Diagnostics and Tools," World Bank Publications - Reports 28281, The World Bank Group.
    7. Ahsan, Faisal Mohammad & Popli, Manish & Kumar, Vikas, 2024. "Formal institutions and cross-border mergers and acquisitions: A systematic literature review and research agenda," International Business Review, Elsevier, vol. 33(5).
    8. Bai, Ye & Girma, Sourafel & Riaño, Alejandro, 2024. "Corporate acquisitions and firm-level uncertainty: Domestic versus cross-border deals," Journal of International Money and Finance, Elsevier, vol. 140(C).
    9. Andre Jungmittag & Robert Marschinski, 2023. "Service trade restrictiveness and foreign direct investment—Evidence from greenfield FDI in business services," The World Economy, Wiley Blackwell, vol. 46(6), pages 1711-1758, June.
    10. Fiorini, Matteo & Hoekman, Bernard, 2018. "Services trade policy and sustainable development," World Development, Elsevier, vol. 112(C), pages 1-12.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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