Geographical and cultural patterns in cross-border mergers and acquisitions: the role of experience

Massimo Del Gatto and Carlo S. Mastinu

Spatial Economic Analysis, 2021, vol. 16, issue 4, 487-505

Abstract: We exploit temporal and spatial correlation in a cross-border merger and acquisition (M&A) database with worldwide coverage to show that firms’ M&A choices are significantly influenced by experience effects related to knowledge accumulation. Our empirical strategy rests on the assumption that experience effects are expected to be at play in M&A directed toward culturally contiguous countries (arguably driven by knowledge accumulation) and not in M&A deals in geographically contiguous countries (arguably driven by transport costs). The analysis is conducted on a bilateral measure of cultural distance (encompassing linguistic, religious and genetic distance indicators), which is meant to capture the idea of the cultural heritage originated by historic linkages.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:taf:specan:v:16:y:2021:i:4:p:487-505

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DOI: 10.1080/17421772.2020.1861321

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