Cross-border mergers and acquisitions and the role of trade costs

• Autores: Alexander Hijzen, Holger Görg, Miriam Manchin
• Localización: Economic papers, ISSN 1725-3187, Nº. 242, 2006, págs. 1-33
• Idioma: inglés
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• Resumen

  • Cross-border mergers and acquisitions (M&Amp;As) have increased dramatically over the last two decades. This paper analyses the role of trade costs in explaining the increase in both the number and the value of cross-border mergers and acquisitions. In particular, we distinguish horizontal and non-horizontal M&Amp;As and investigate whether distance and trade policy barriers affect these two types of mergers differently. We analyse this question using industry data for 23 OECD countries for the period 1990-2001. Our findings suggest that while in the aggregate trade costs affect cross-border merger activity negatively its impact differs importantly across horizontal and non-horizontal mergers. The impact of trade costs is less negative for horizontal mergers, which is consistent with the tariff-jumping argument.