Geopolitical risk and M&A: The role of national governance institutions

Sandeep Rao, Santosh Koirala, Sulaiman Aldhawyan and Shaen Corbet

Economics Letters, 2023, vol. 225, issue C

Abstract: Examining nineteen emerging economies from 1990 to 2018, we identify a positive effect of geopolitical risk on mergers and acquisition (M&A) deal frequency, driven mainly by an increase in domestic M&A. However, we find a negative effect of geopolitical risk on the M&A deal size, highlighting the deadweight cost created by the geopolitical risk. The quality of national governance moderates the deterring effect of geopolitical risk.

Keywords: Geopolitical risk; Mergers and acquisitions; National institutions; Governance (search for similar items in EconPapers)
JEL-codes: F51 F52 G34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:225:y:2023:i:c:s0165176523000873

DOI: 10.1016/j.econlet.2023.111062

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