The Concurrent Impact of Cultural, Political, and Spatial Distances on International Mergers and Acquisitions

MC. Di Guardo, Emanuela Marrocu and Raffaele Paci

Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia

Abstract: The paper explores the concurrent effects of cultural, political, and spatial distances on M&A flows occurring between any two countries belonging to the whole European Union (27 States) or to the European Neighbors group (16 States) over the period 2000-2011 . By employing zero-inflated negative binomial specifications, entailing both a binary and count process, we adequately model the two different mechanisms which may generate zero observations in the cross-border bilateral deals. Zeros may be due to either the lack of any transactions or unsuccessful negotiations. We find robust evidence that the multi-dimensional distance between two countries negatively affects the probability that they will engage in M&A deals, while the recurrence rate of these deals is positively related to population, gross domestic product, and technological capital and negatively related to geographical distance.

Keywords: zero-inflated models; geographical distance; European Union; european neighboring countries; cultural and political distances; Cross-border M&As (search for similar items in EconPapers)
JEL-codes: C31 F23 G34 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cfn, nep-geo and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: The Concurrent Impact of Cultural, Political, and Spatial Distances on International Mergers and Acquisitions (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cns:cnscwp:201308

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