Cross-Border Mergers and Acquisitions: On Revealed Comparative Advantage and Merger Waves

Steven Brakman (), Harry Garretsen, Charles van Marrewijk and Charles van Marrewijk
Authors registered in the RePEc Author Service: Charles van Marrewijk

No 1602, CESifo Working Paper Series from CESifo

Abstract: By combining two large data sets (on international trade flows and on mergers and acquisitions – M&As), we are able to test two implications of Neary’s (2003, 2004a) recent theoretical work. Analyzing M&As in a General Oligopolistic Equilibrium (GOLE) model incorporating strategic interaction between firms in a general equilibrium setting, we argue that: (i) M&As follow revealed comparative advantage as measured by the Balassa index, and (ii) M&As come in waves. We find convincing support for both hypotheses, thus showing for the first time that there is an empirical connection between export performance and mergers and acquisitions.

Keywords: comparative advantage; cross border mergers and acquisitions; merger waves; general oligopolistic equilibrium model (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-bec, nep-com, nep-fmk, nep-ind, nep-int and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Working Paper: Cross-border Mergers and Acquisitions: On Revealed Comparative Advantage And Merger Waves (2007)
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