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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 interna- tional mergers and acquisitions (M&A) in services sectors. The analysis is based on bilateral sectoral M&A ow data and detailed information on policy barriers from a new database. Restrictive investment policies are found to reduce the probability of M&A in ows, 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, 2015. "Cross-Border Mergers and Acquisitions in Services: The Role of Policy and Industrial Structure," Carlo Alberto Notebooks 438, Collegio Carlo Alberto.
    • Handle: RePEc:cca:wpaper:438
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    Cited by:

    1. 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.
    2. 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).
    3. World Bank Group, 2017. "Investment Policy and Promotion Diagnostics and Tools," World Bank Publications - Reports 28281, The World Bank Group.
    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. 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.
    6. Fiorini, Matteo & Hoekman, Bernard, 2018. "Services trade policy and sustainable development," World Development, Elsevier, vol. 112(C), pages 1-12.
    7. 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.
    8. 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.

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    More about this item

    Keywords

    Cross-border M&A; services trade policy; trade frictions;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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