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Same as it ever was? Europe's national borders and the market for corporate control

Marc Umber, Michael Grote and Rainer Frey

Journal of International Money and Finance, 2014, vol. 40, issue C, 109-127

Abstract: National borders continue to be strong barriers for mergers and acquisitions in Europe. Using regional data, we construct a gravity model and find that the restraining impact of national borders decreased by more than 17 percent between 1991 and 2007. However, no significant change has occurred since the mid-1990s (i.e., four years before the introduction of the euro). In comparison, we run a corresponding analysis in the United States using the 10 federal regions as country equivalents. The resulting ‘quasi-border’ effect in the United States is weaker than that in the European Union. Yet its decline by 43 percent is much stronger in the same period. We conclude that European integration policy has had little effect on fostering M&A cross-border transactions.

Keywords: European integration; Corporate control; Border effects (search for similar items in EconPapers)
JEL-codes: F21 G34 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:40:y:2014:i:c:p:109-127

DOI: 10.1016/j.jimonfin.2013.09.002

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