Europe integrates less than you think: Evidence from the market for corporate control in Europe and the US

Marc Umber, Michael Grote and Rainer Frey

No 150, Frankfurt School - Working Paper Series from Frankfurt School of Finance and Management

Abstract: National borders are still strong barriers for mergers and acquisitions in Europe. We estimate a gravity equation model based on NUTS 2-regions and find that the restraining impact of national borders decreased by about a third between 1990 and 2007. However, there has been no significant change since 1997, i.e., two years before the introduction of the Euro. To benchmark our results we run a corresponding analysis within the United States using the ten federal OMB regions as country equivalents. The 'quasi border'-effect in the US is weaker than in the EU and even declines more during the same time period. We conclude that European integration policy has little effect on fostering 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: 2010
New Economics Papers: this item is included in nep-com, nep-eec and nep-eur
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fsfmwp:150

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