Participation in global value chains and M&A flows

Andrea Ciani and Wildmer Daniel Gregori

Industrial and Corporate Change, 2025, vol. 34, issue 1, 25-52

Abstract: This study investigates whether companies operating in industrial sectors characterized by a higher participation in global value chains (GVC) are more likely to be involved in cross-border mergers and acquisitions (M&A). We focus on firms acquired in the EU27 during the period 2008–2020 implementing a gravity model. Results show that cross-border investments are indeed associated with sectoral GVC participation, in particular the dependence on intermediates supplied by other countries (i.e., backward GVC participation) of the target country-sector, which is positively correlated with M&A flows. This evidence is confirmed when the acquired firm operates in high-tech sectors, and when the investor is based in OECD countries. In addition, we find that companies from non-OECD countries supplying inputs to other countries (i.e., higher forward GVC participation) are more likely to pursue a cross-border acquisition.

Date: 2025
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