CORE-PERIPHERY RELATIONS IN THE INTERNATIONAL MERGERS AND ACQUISITIONS NETWORK

Pablo Galaso and Angeles Sanchez-Diez

Applied Econometrics and International Development, 2020, vol. 20, issue 1, 23-34

Abstract: This article studies the transnational corporations’ ownership and investment relationships between countries. Using Thomson Reuters SDC Platinum database on mergers and acquisitions and social network analysis techniques, the paper analyzes the international mergers and acquisitions network (IMAN), where vertices are 211 countries and edges represent the flow of international mergers and acquisitions between them. After elaborating the IMAN, it estimates the fitness of Borgatti and Everett (2000) core-periphery model to the network. Furthermore, it analyzes the fitness evolution between 1999 and 2013 and identifies core, semi-periphery and periphery countries. Results confirm the existence of a sharp and persistent core-periphery structure in the relations between countries. The core is made of only 15 nations that are almost completely interconnected among them and responsible for most of investments in transnational corporations. 41 semi-peripheral countries are relatively well connected while achieving about one fourth of investments. Finally, the remaining 155 nations in the periphery are mostly disconnected among them and only receive marginal investments from the core and semi-periphery nations. These results reveal that the ownership and control of the means of production at the global level is driven by polarized and unequal relationships between countries.

Keywords: mergers and acquisitions; foreign direct investment; world economy; social network analysis; core-periphery; transnational corporations. (search for similar items in EconPapers)
JEL-codes: F02 F14 F23 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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