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Horizontal, Vertical, and Conglomerate Cross Border Acquisitions

Author

Listed:
  • Nils Herger

    (Study Center Gerzensee, Switzerland)

  • Steve McCorriston

    (Department of Economics, University of Exeter)

Abstract

By using data on cross-border acquisitions (CBAs), this paper explores the distribution of the strategies pursued when multinational enterprises integrate a foreign subsidiary into their organizational structure. Based on a measure of vertical relatedness, each of the 165,000 acquisitions in our sample covering 31 source and 58 host countries can be classified as horizontal, vertical, or conglomerate. Three novel features of CBAs are highlighted. First, horizontal and vertical CBAs are relatively stable over time. Second, substantial parts of CBAs involve conglomerate acquisitions. Third, the wave-like growth of CBAs arises primarily from changes in conglomerate activity, which responds to international valuation differences between financial markets.

Suggested Citation

  • Nils Herger & Steve McCorriston, 2014. "Horizontal, Vertical, and Conglomerate Cross Border Acquisitions," Discussion Papers 1402, Exeter University, Department of Economics.
  • Handle: RePEc:exe:wpaper:1402
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    File URL: http://people.exeter.ac.uk/cc371/RePEc/dpapers/DP1402.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Cross-Border Acquisitions; Multinational Firm; Horizontal Merger; Vertical Merger; Conglomerate Merger;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • 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
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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