Participation in Global Value Chains and M&A flows

Andrea Ciani and Wildmer Daniel Gregori ()
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Wildmer Daniel Gregori: European Commission, https://ec.europa.eu/jrc/en

No 2022-09, JRC Working Papers in Economics and Finance from Joint Research Centre, European Commission

Abstract: This study investigates to which extent firms operating in sectors more integrated into Global Value Chains (GVC) are more likely to be involved in cross-border Mergers and Acquisitions (M&A) flows. We focus on firms acquired in the EU27 during the period 2008-2020 employing a gravity model. Results show that cross-border investments are indeed associated with sectoral GVC participation, in particular the dependence on intermediate products supplied by other countries (i.e. backward GVC participation) of the target country-sector is positively correlated with M&A flows. This evidence is confirmed when the acquired firm operates in manufacturing or high-tech sectors, and when the investor originates from OECD countries. In addition, results show that companies from countries suppling inputs to other countries are more likely to pursue a cross-border acquisition.

Keywords: Global Value Chains; Mergers and Acquisitions; Global Economy; Gravity model; EU firms (search for similar items in EconPapers)
JEL-codes: F21 F23 G34 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2022-08
New Economics Papers: this item is included in nep-cfn, nep-com, nep-eec, nep-int and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:jrs:wpaper:202209

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