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Cross-Border M&A Inflows and the Quality of Institutions: A Cross-Country Panel Data Analysis

  • Jung Hur

    ()

    (Department of Economics, National University of Singapore)

  • Rasyad A. Parinduri

    ()

    (Singapore Centre for Applied and Policy Economics (SCAPE) Department of Economics, National University of Singapore)

  • Yohanes E. Riyanto

    ()

    (Department of Economics, National University of Singapore)

This paper provides an empirical explanation to the observed disparity in cross-border M&A inflows to developing and developed countries over the last two decades. We show two main results. First, the disparity can be attributed to the difference in the quality of institutions between the two groups of countries. Second, the gain from reforming institutions in developing countries is smaller than that in developed countries. These findings suggest that, with the current speed of institutional reforms in developing countries, the disparity is likely to persist.

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File URL: http://www.fas.nus.edu.sg/ecs/pub/wp-scape/0708.pdf
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Paper provided by National University of Singapore, Department of Economics, SCAPE in its series SCAPE Policy Research Working Paper Series with number 0708.

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Length: 32 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:sca:scaewp:0708
Contact details of provider: Web page: http://www.fas.nus.edu.sg/ecs/scape/index.html

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  1. di Giovanni, Julian, 2005. "What drives capital flows? The case of cross-border M&A activity and financial deepening," Journal of International Economics, Elsevier, vol. 65(1), pages 127-149, January.
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  4. Borrmann, Axel & Busse, Matthias & Neuhaus, Silke, 2006. "Institutional Quality and the Gains From Trade," HWWA Discussion Papers 341, Hamburg Institute of International Economics (HWWA).
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  8. 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.
  9. Rose, Andrew K & Spiegel, Mark, 2005. "Offshore Financial Centres: Parasites or Symbionts?," CEPR Discussion Papers 5081, C.E.P.R. Discussion Papers.
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  12. Amemiya, Takeshi & MaCurdy, Thomas E, 1986. "Instrumental-Variable Estimation of an Error-Components Model," Econometrica, Econometric Society, vol. 54(4), pages 869-80, July.
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  15. Campante, Filipe Robin & Chor, Davin & Do, Quoc-Anh, 2009. "Instability and the Incentives for Corruption," Scholarly Articles 4778510, Harvard Kennedy School of Government.
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