The Impact of the COVID-19 Pandemic on Cross-Border Mergers and Acquisitions’ Determinants: New Empirical Evidence from Quasi-Poisson and Negative Binomial Regression Models

Han-Sol Lee, Ekaterina A. Degtereva and Alexander M. Zobov
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Han-Sol Lee: Department of Marketing, Peoples’ Friendship University of Russia, Miklukho-Maklaya, 6, 117198 Moscow, Russia
Ekaterina A. Degtereva: Department of Marketing, Peoples’ Friendship University of Russia, Miklukho-Maklaya, 6, 117198 Moscow, Russia
Alexander M. Zobov: Department of Marketing, Peoples’ Friendship University of Russia, Miklukho-Maklaya, 6, 117198 Moscow, Russia

Economies, 2021, vol. 9, issue 4, 1-13

Abstract: The cross-border movement of capital has suffered due to the COVID-19 pandemic since December 2019. Nevertheless, it is unrealistic for multinational companies to withdraw giant global value chains (GVCs) overnight because of the pandemic. Instead, active discussions and achievements of deals in cross-border mergers and acquisitions (M&As) are expected in the post-COVID-19 era among various other market entry modes, considering the growing demand in high technologies in societies. This paper analyzes particular determinants of cross-border mergers and acquisitions (M&As) during the pandemic year (2020) based on cross-sectional datasets by employing quasi-Poisson and negative binomial regression models. According to the empirical evidence, COVID-19 indices do not hamper M&A deals in general. This indicates that managerial capabilities of the coronavirus, not the outbreak itself, determined locational decisions of M&A deals during the pandemic. In this vein, it is expected that the vaccination rate will become a key factor of locational decision for M&A deals in the near future. Furthermore, countries that have been outstanding in coping with COVID-19 and thus serve as a good example for other nations may seize more opportunities to take a leap forward. In addition, as hypothesized, the results present positive and significant associations with M&A deals and the SDG index, confirming the resource-based theory of internationalization. In particular, the achievement of SDGs seems to exercise much influence in developing countries for M&A bidders during the pandemic year. This indicates that the pandemic demands a new zeitgeist that pursues growth while resolving existing but disregarded environmental issues and cherishes humanitarian values, for all countries, non-exceptionally, standing at the start line of the post-COVID-19 era.

Keywords: entry mode; mergers and acquisitions (M&As); sustainable development goal (SDG) index; COVID-19; generalized linear model (GLM) (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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