The Determinants of Cross-border M&As: the Role of Institutions and Financial Development in Gravity Model

Hea-Jung Hyun and Hyuk Hwang Kim

Finance Working Papers from East Asian Bureau of Economic Research

Abstract: This paper examines the macroeconomic determinants of cross border M&As. Using a panel data set of bilateral M&A deal values for 101 countries and 17 years ranging from 1989 to 2005, we investigate both home and host country factors that may play an important role in determining the size and direction of M&A flows. Overall, the empirical results suggest that legal and institutional quality and financial market development increase M&A volume across countries. The significant effect of institutions however, may disappear for transactions between countries of the similar stage of the development.

Keywords: Cross-border M&A; Quality of Institutions; Financial Market Development; economic integration; Tobit Model (search for similar items in EconPapers)
JEL-codes: C23 F23 O11 (search for similar items in EconPapers)
Date: 2007-11
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: The Determinants of Cross‐border M&As: The Role of Institutions and Financial Development in the Gravity Model (2010)
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