The effect of restrictive measures on cross‐border investment in the European Union

Wildmer Daniel Gregori and Michela Nardo

The World Economy, 2021, vol. 44, issue 7, 1914-1943

Abstract: This study sheds light on the effect of restrictive policies, such as screening procedures, on mergers and acquisitions (M&A) flows into EU Member States in the period 2011–18. By implementing an augmented gravity model, we show that different restrictive measures affect cross‐border investments unevenly. The presence of formal screening procedures per se does not negatively affect cross‐border investments on average. The exception is M&As flows from tax havens that are negatively affected by the presence of screening procedures in the target country. Other restrictive policies such as licensing requirements, quantitative limitations, restrictions to the market access and operation of foreign companies limit M&A flows. This is particularly relevant in manufacturing and nonfinancial services where M&A flows are negatively influenced by restrictions on foreign personnel being employed in key positions, and restrictions on the establishment of branches, land acquisition or profit and capital repatriations.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/twec.13104

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:44:y:2021:i:7:p:1914-1943

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().