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Does Geography Play a Role in Domestic Takeovers? Theory and Finnish Micro-level Evidence

Author

Listed:
  • Petri Böckerman

    (Labour Institute for Economic Research)

  • Eero Lehto

    (Labour Institute for Economic Research)

Abstract

This paper explores domestic mergers and acquisitions (M&As) from the regional perspective. The Finnish firm-level evidence reveals that geographical closeness matters a lot for M&As within a single country. Thus, a great number of domestic M&As occur within narrowly defined regions. Interestingly, domestic M&As reinforce the core-periphery dimension. The results from matched firm-level data show that the strong ability by an acquiring company to monitor the target (measured by the knowledge embodied in human capital) is able to support M&As that occur across distant locations.

Suggested Citation

  • Petri Böckerman & Eero Lehto, 2005. "Does Geography Play a Role in Domestic Takeovers? Theory and Finnish Micro-level Evidence," Urban/Regional 0505002, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpur:0505002
    Note: Type of Document - pdf; pages: 33
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    mergers; acquisitions; monitoring; agglomeration;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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