Mergers and acquisitions & trade: A global value chain analysis

Federico Carril‐Caccia and Elena Pavlova

The World Economy, 2020, vol. 43, issue 3, 586-614

Abstract: The present paper deals with how the insertion in international trade and global value chains (GVCs) of countries affects their capacity of attracting foreign mergers and acquisitions (M&As). To this end, we combine data for bilateral M&As and trade in value added for the period 2001–15 and estimate an augmented gravity equation. Results indicate that trade openness per se does not favour M&As. Nevertheless, bilateral free trade agreements, heterogeneity of destinations (sources) for exports (imports) of intermediate and final goods, and position and participation in global value chains are relevant for explaining bilateral M&As. Moreover, their role is significantly different depending on the level of development of the home and host countries.

Date: 2020
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https://doi.org/10.1111/twec.12882

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