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Symmetric and asymmetric effects of proximities. The case of M&A deals in Italy

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  • Ron Boschma
  • Emanuela Marrocu
  • Raffaele Paci

Abstract

This article investigates the effect of geographical, industrial, organizational and institutional proximity on the probability that any two firms located in Italy engage in a mergers and acquisitions (M&A) deal. Within a logistic rare event framework, we investigate 4261 actual deals completed over the period 2000–2011 and around 3.8 million potential deals. We find robust evidence that all forms of proximity have a positive effect, especially industrial relatedness. Moreover, we find evidence that proximities generate asymmetric effects on M&A deals, depending on the location of bidders and targets and on whether some specific individual characteristics are featured by the acquirer or by the target firm.

Suggested Citation

  • Ron Boschma & Emanuela Marrocu & Raffaele Paci, 2016. "Symmetric and asymmetric effects of proximities. The case of M&A deals in Italy," Journal of Economic Geography, Oxford University Press, vol. 16(2), pages 505-535.
    • Handle: RePEc:oup:jecgeo:v:16:y:2016:i:2:p:505-535.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbv005
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    Cited by:

    1. Diego Useche & Sophie Pommet, 2021. "Where do we go? VC firm heterogeneity and the exit routes of newly listed high-tech firms," Small Business Economics, Springer, vol. 57(3), pages 1339-1359, October.
    2. Shixiang Wang & Minyuan Zhao, 2018. "A tale of two distances: a study of technological distance, geographic distance and multilocation firms," Journal of Economic Geography, Oxford University Press, vol. 18(5), pages 1091-1120.
    3. Jin, Zhi & Yang, Yinan & Zhang, Liguang, 2021. "Geographic proximity and cross-region merger and acquisitions: Evidence from the opening of high-speed rail in China," Pacific-Basin Finance Journal, Elsevier, vol. 68(C).
    4. Daria Denti & Alessandro Crociata & Alessandra Faggian, 2021. "Knocking on Hell’s door. Dismantling hate with cultural consumption," Papers in Evolutionary Economic Geography (PEEG) 2131, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2021.
    5. Viktor Kvĕtoň & Aleš Bĕlohradský & Jiří Blažek, 2020. "The variegated role of proximities in acquisitions by domestic and international companies in different phases of economic cycles," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 583-602, June.
    6. Xiaodong Huang & Godfrey Yeung & Debin Du, 2024. "Does Technological Intensity Matter for Global Cross‐Border Mergers and Acquisitions in Manufacturing, 1998–2018?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 115(2), pages 302-323, April.
    7. Di Guardo, Maria Chiara & Marrocu, Emanuela & Paci, Raffaele, 2016. "The effect of local corruption on ownership strategy in cross-border mergers and acquisitions," Journal of Business Research, Elsevier, vol. 69(10), pages 4225-4241.
    8. Harald Bathelt & Sebastian Henn, 2021. "Knowledge exchanges, trust, and secretive geographies in merger and acquisition processes," Environment and Planning A, , vol. 53(6), pages 1435-1453, September.
    9. Guo, Yue & Yang, Yu & Wang, Chang, 2021. "Global energy networks: Geographies of mergers and acquisitions of worldwide oil companies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 139(C).
    10. Calogero Guccio & Domenico Lisi & Ilde Rizzo, 2019. "When the purchasing officer looks the other way: on the waste effects of debauched local environment in public works execution," Economics of Governance, Springer, vol. 20(3), pages 205-236, September.
    11. Chih, Yao-Yu & Demir, Firat & Hu, Chenghao & Liu, Junyi & Shen, Hewei, 2023. "A spatial analysis of local corruption on foreign direct investment: Evidence from Chinese cities," European Journal of Political Economy, Elsevier, vol. 79(C).
    12. Nils Ellwanger & Ron Boschma, 2013. "Who acquires whom? The role of geographical proximity and industrial relatedness in Dutch domestic M&As between 2002 and 2008," Papers in Evolutionary Economic Geography (PEEG) 1319, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2013.
    13. Aranha, Meera Laetitia B & Mahapatra, Mrutyunjay & Jacob, Remya Tressa, 2024. "Mergers of public sector banks: Best partner selection using a data-driven approach," Finance Research Letters, Elsevier, vol. 63(C).
    14. Stefano Usai & Emanuela Marrocu & Raffaele Paci, 2017. "Networks, Proximities, and Interfirm Knowledge Exchanges," International Regional Science Review, , vol. 40(4), pages 377-404, July.
    15. Diego Useche & Sophie Pommet, 0. "Where do we go? VC firm heterogeneity and the exit routes of newly listed high-tech firms," Small Business Economics, Springer, vol. 0, pages 1-21.
    16. Diego Useche & Ernest Miguelez & Francesco Lissoni, 2019. "Highly skilled and well connected: Migrant inventors in cross-border M&As," Post-Print halshs-02024499, HAL.
    17. Diego Useche & Ernest Miguelez & Francesco Lissoni, 2020. "Highly skilled and well connected: Migrant inventors in cross-border M&As," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(5), pages 737-763, July.

    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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