Horizontal, Vertical, and Conglomerate Cross Border Acquisitions

Nils Herger and Steve McCorriston
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Nils Herger: Study Center Gerzensee, Switzerland
Steve McCorriston: Department of Economics, University of Exeter

No 1402, Discussion Papers from University of Exeter, Department of Economics

Abstract: By using data on cross-border acquisitions (CBAs), this paper explores the distribution of the strategies pursued when multinational enterprises integrate a foreign subsidiary into their organizational structure. Based on a measure of vertical relatedness, each of the 165,000 acquisitions in our sample covering 31 source and 58 host countries can be classified as horizontal, vertical, or conglomerate. Three novel features of CBAs are highlighted. First, horizontal and vertical CBAs are relatively stable over time. Second, substantial parts of CBAs involve conglomerate acquisitions. Third, the wave-like growth of CBAs arises primarily from changes in conglomerate activity, which responds to international valuation differences between financial markets.

Keywords: Cross-Border Acquisitions; Multinational Firm; Horizontal Merger; Vertical Merger; Conglomerate Merger (search for similar items in EconPapers)
JEL-codes: F15 F21 F23 F33 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:1402

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