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Title:Cross-border mergers and acquisitions and the role of trade costs PDF Logo
Authors:Hijzen, Alexander
Görg, Holger
Manchin, Miriam
Issue Date:2006
Series/Report no.:European Economy - Economic Papers, Directorate-General for Economic and Financial Affairs, European Commission, Brussels 242
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 both the number and the value of cross-border mergers and acquisitions. In particular, we distinguish horizontal and non-horizontal M&As and investigate whether distance and trade policy barriers 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
ISBN:9279011839
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW

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