Cross-Border Mergers & Acquisitions: A Piece of The Natural Resource Curse Puzzle

Julia Swart () and Charles van Marrewijk ()

No 09-053/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We combine the resource curse literature with the literature on cross-border mergers and acquisitions (M&As) to investigate two hypotheses, namely (i) natural resources wealth: countries with a comparative advantage in natural resources attract more M&As in natural resource intensive sectors and (ii) natural resources dependency: countries with a high natural resources dependency attract fewer M&As in all sectors. Using the Thomson dataset we test these hypotheses for a sample of 49 African and Latin American countries in the period 1988 - 2007. To test these hypotheses we disaggregate the data in sectors intensive and not intensive in natural resources. We emphasize the distinction between resource dependency and wealth. Both hypotheses were confirmed by our findings. Thus, resource dependency has a “crowding out” effect on M&As in all sectors, and natural resources wealth has a "crowding in" effect on M&As in sectors intensive in natural resources.

Keywords: Gravity Equation; Mergers and Acquisitions; Natural Resources; Resource Curse (search for similar items in EconPapers)
JEL-codes: F23 Q56 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
Date: 2009-06-12, Revised 2009-08-18

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Persistent link: http://EconPapers.repec.org/RePEc:dgr:uvatin:20090053

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