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The Cross Border Mergers and Acquisitions Wave of the Late 1990s

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  • Simon J. Evenett

Abstract

To establish a benchmark, the cross border mergers and acquisitions wave of the late 1990s is compared to its predecessor in the late 1980s. It is found to be at least five times larger (in real terms), to involve firms from more OECD nations, and to include many more service sector transactions. However, in comparison to the size of national stock market capitalizations, foreign mergers with and acquisitions of domestic firms during this latest wave were small, especially in the Group of Seven leading industrial economies. The effect of cross border mergers and acquisitions on performance in one important service sector, banking, is also examined. Specifically, the relative importance of cross border mergers and acquisitions, domestic mergers and acquisitions, domestic entry and exit, and strategic alliances and joint ventures for interest rate spreads was estimated for 13 industrial nations. The principal findings suggest that the effects of these firm-driven changes in banking market structure differ markedly between EU member states and non-EU industrialized economies. This highlights the importance of differentiating between types of cross border inter-firm agreements and the pitfalls of generalising about the effects of the latest wave of cross border mergers and acquisitions as many of the harshest critics of globalization do.

Suggested Citation

  • Simon J. Evenett, 2003. "The Cross Border Mergers and Acquisitions Wave of the Late 1990s," NBER Working Papers 9655, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9655
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    References listed on IDEAS

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    1. Evenett, Simon J., 2003. "Do all networks facilitate international commerce? US law firms and the international market for corporate control," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 520-537, December.
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    Cited by:

    1. Carletti, Elena & Hartmann, Philipp & Ongena, Steven, 2015. "The economic impact of merger control legislation," International Review of Law and Economics, Elsevier, vol. 42(C), pages 88-104.
    2. Jung Hur & Rasyad A. Parinduri & Yohanes E. Riyanto, 2011. "Cross‐Border M&A Inflows And Quality Of Country Governance: Developing Versus Developed Countries," Pacific Economic Review, Wiley Blackwell, vol. 16(5), pages 638-655, December.
    3. repec:eee:ijrema:v:30:y:2013:i:1:p:19-35 is not listed on IDEAS
    4. Joseph A. Clougherty & Klaus Gugler & Lars Sørgard, 2012. " Cross-Border Mergers and Domestic Wages: Integrating Positive 'Spillover' Effects and Negative 'Bargaining' Effects," Department of Economics Working Papers wuwp136, Vienna University of Economics and Business, Department of Economics.
    5. Paula Cristina da Silva Ferreira Neto Rodrigues & António Abílio Garrido Brandão & António de Melo Cerqueira, 2008. "The Macroeconomic Determinants of Cross Border Mergers and Acquisitions and Greenfield Investments," FEP Working Papers 281, Universidade do Porto, Faculdade de Economia do Porto.
    6. Rabin Hattari & Ramkishen S. Rajan, 2009. "Cross-border Mergers and Acquisitions (M&As) in Developing Asia: The Role of Financial Variables," Working Papers 362009, Hong Kong Institute for Monetary Research.
    7. Bertrand, Olivier & Ivaldi, Marc, 2006. "European Competition Policy in International Markets," IDEI Working Papers 419, Institut d'Économie Industrielle (IDEI), Toulouse.
    8. Lee, Bong-Soo & Min, Byung S., 2011. "Exchange rates and FDI strategies of multinational enterprises," Pacific-Basin Finance Journal, Elsevier, vol. 19(5), pages 586-603, November.
    9. A. N. Bany-Ariffin & Mohamad Hisham & Carl B. McGowan, 2016. "Macroeconomic factors and firm’s cross-border merger and acquisitions," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(2), pages 277-298, April.
    10. Chak Hung J. Cheng & Michael K. Salemi, 2009. "Feast and Famine: Explaining Big Swings in the Hong Kong Economy between 1981 and 2007," Working Papers 372009, Hong Kong Institute for Monetary Research.
    11. Anu Kovarikova Arro, 2005. "Globalization, Increasing Returns in Component Production, and the Pattern of Trade," CERGE-EI Working Papers wp265, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    12. Charles van Marrewijk & Gus Garita, 2008. "Countries of a Feather flock together," Tinbergen Institute Discussion Papers 08-067/2, Tinbergen Institute, revised 19 Sep 2008.
    13. Boateng, Agyenim & Hua, Xiuping & Uddin, Moshfique & Du, Min, 2014. "Home country macroeconomic factors on outward cross-border mergers and acquisitions: Evidence from the UK," Research in International Business and Finance, Elsevier, vol. 30(C), pages 202-216.
    14. Rivera, Eugenio, 2008. "Models of privatization and development of competition in telecommunications in Central America and Mexico," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1973, December.

    More about this item

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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