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Title:Cross-border mergers and acquisitions and the role of trade costs
Authors:Hijzen, Alexander
Görg, Holger
Manchin, Miriam
Issue Date:2008
Citation:[Volume:] 52 [Issue:] 5 [Pages:] 849-866 [Journal:] European economic review : EER [ISBN:] 0014-2921
Abstract:Cross-border mergers and acquisitions (M&As) have increased dramatically over the last two decades. This paper analyses the role of trade costs in explaining the increase in the number of cross-border M&As. In particular, we distinguish horizontal and non-horizontal M&As and investigate whether trade costs affect these two types of mergers differently. We analyse this question using industry data for 23 OECD countries for the period 1990–2001. Our findings suggest that while in the aggregate trade costs affect cross-border merger activity negatively its impact differs importantly across horizontal and non-horizontal mergers. The impact of trade costs is less negative for horizontal mergers, which is consistent with the tariff-jumping argument.
Subjects:Mergers and acquisitions
International trade
Trade costs
Gravity
FDI
JEL:F02
F15
F21
F23
Persistent Identifier of the first edition:doi:10.1016/j.euroecorev.2007.07.002    
Document Type:Article
Appears in Collections:Economists Online

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