Location Choices of Multinational Firms: The Case of Mergers and Acquisitions

Olivier Bertrand () and Jean-Louis Mucchielli
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Olivier Bertrand: Toulouse School of Economics, Postal: REMAQ - Université de Toulouse 1, Manufacture des Tabacs - B timent F - 21, Allée de Brienne, 31000, Toulouse (France),

Journal of Economic Integration, 2007, vol. 22, 181-209

Abstract:

This article examines the location choices of cross-border Mergers and Acquisitions (M&A) between OECD members' firms in the 1990's. In addition to traditional determinants of FDI, we estimate the impact of specific factors affecting the M&A location pattern. Two distinct econometric methods are implemented: the conditional logit and the count model. We find that the supply of target firms constrains the location of M&A. However, it is not the only determinant of location: the market size, the labor cost, the market access and the financial openness play a positive and significant role in the M&A location. A bandwagon effect is also observed. In the opposite, the corporate tax rate and the productivity decrease the probability to attract M&A. Cultural and geographic distances as well as differences in legal rules exert a negative significant impact on M&A strategies too. Only the ownership structure has contrasted results.

Keywords: Foreign Direct Investment; Merger and Acquisition; Location; Conditional Logit; Count Model (search for similar items in EconPapers)
JEL-codes: F23 L10 R30 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Location Choices of Multinational Firms: the case of Mergers and Acquisitions (2007)
Working Paper: Location Choices of Multinational Firms: the case of Mergers and Acquisitions (2007)
Working Paper: Location Choices of Multinational Firms: The Case of Mergers and Acquisitions (2004)
Working Paper: Location Choices Of Multinational Firms: The Case Of Mergers And Acquisitions (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0391

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