Macroeconomic influences on M&A deal outcomes: An analysis of domestic and cross-border M&As in developed and emerging economies

Deepak Kumar, Keya Sengupta and Mousumi Bhattacharya

Journal of Business Research, 2023, vol. 161, issue C

Abstract: The abandonment of announced merger and acquisition (M&A) deals during negotiations has recently gained prominence in academia and practice. However, the effect of macroeconomic variations on announced deal outcome is uncertain. This study attempts to determine the impact of interest rate, inflation, real exchange rate, and gross domestic product on the abandonment of domestic and cross-border M&As through autoregressive distributed lag regression on BRICS and G7 countries. Domestic M&As from BRICS are very volatile, whereas outbound M&As from G7 are mostly stable to changing home country macroeconomy. The findings reveal divergences in firms’ financial abilities and strategic mindsets in developed (G7) and emerging (BRICS) countries. Macroeconomic changes have a varying impact on deal abandonments. The results provide a better understanding of higher abandonments in emerging economies. This study will help firms create differentiated strategies for M&A negotiation under changing macroeconomic scenarios and policymakers frame policies influencing M&A outcomes.

Keywords: Pre-completion; Termination; Completion; Macroeconomy; GDP, capital flow (search for similar items in EconPapers)
JEL-codes: E60 F23 G34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148296323001893
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:161:y:2023:i:c:s0148296323001893

DOI: 10.1016/j.jbusres.2023.113831

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().