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Regional Integration and Cross-Border Mergers and Acquisitions in Africa

Author

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  • Wilson, Magdalene Kasyoka

    (University of Johannesburg, Johannesburg, South Africa)

  • Bala, Alain Pholo

    (University of Johannesburg, Johannesburg, South Africa)

Abstract

This study uses a structural gravity model to examine how regional integration affected cross-border mergers and acquisitions (M&As) in Africa during the period from 2000 to 2014. We found that customs unions in Africa, specifically the Southern Africa Customs Union (SACU) and the East African Community (EAC) were significant drivers of M&As by firms within the unions but not for those outside the unions, perhaps the result of the relatively small size of these economic blocs. The Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC) do not appear to encourage either intra- or extra- regional M&A flows. These findings suggest that the depth of regional integration determines intra-regional M&A flows in Africa. Therefore, African governments should strengthen existing economic integration agreements to benefit more from cross-border M&A flows from within the regional blocs and to attract foreign investment from non-member countries.

Suggested Citation

  • Wilson, Magdalene Kasyoka & Bala, Alain Pholo, 2019. "Regional Integration and Cross-Border Mergers and Acquisitions in Africa," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 34(1), pages 109-132.
    • Handle: RePEc:ris:integr:0765
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    Citations

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    Cited by:

    1. Enoch Kwaw-Nimeson & Ze Tian, 2023. "Institutional Quality, Foreign Direct Investment, and Regional Integration: Empirical Evidence From CEN-SAD," SAGE Open, , vol. 13(1), pages 21582440221, January.
    2. Yamlaksira S. Getachew & Roger Fon & Elie Chrysostome, 2023. "On the location choices of African multinational enterprises: Do supranational economic institutions matter?," Journal of International Business Policy, Palgrave Macmillan, vol. 6(4), pages 453-490, December.

    More about this item

    Keywords

    Mergers and acquisitions; Africa; Economic integration; Institutions; Gravity model; Foreign direct investment;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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