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

Hyun, Hea-Jung; Kim, Hyuk Hwang

doi:10.1111/j.1467-9701.2009.01224.x

Cited by 66 publications

(54 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…This result may be explained by considering the role played by social and institutional distances in affecting inter-firm economic exchange (Habib and Zurawicki, 2002;Bénassy-Quéré et al, 2007;Hyun and Kim, 2010). Indeed, in the models discussed so far, due to lack of data, we could not include an indicator for social proximity between two firms.…”

Section: Testing For Asymmetric Effectsmentioning

confidence: 96%

Symmetric and asymmetric effects of proximities. The case of M&A deals in Italy

2015

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract (max. 100) This paper investigates the effect of geographical, industrial, organizational and institutional proximity on the probability that any two firms located in Italy engage in a M&A deal. Within a logistic rare event framework, we investigate 4,261 actual deals completed over the period 2000-2011 and around 3.8 million potential deals. We find robust evidence that all forms of proximity have a positive effect, especially industrial relatedness. Moreover, we find evidence that proximities generate asymmetric effects on M&A deals, depending on the location of bidders and targets and on whether some specific individual characteristics are featured by the acquirer or by the target firm. Terms of use: Documents in EconStor may

show abstract

Section: Testing For Asymmetric Effectsmentioning

confidence: 96%

Symmetric and asymmetric effects of proximities. The case of M&A deals in Italy

2015

View full text Add to dashboard Cite

show abstract

“…We also add an additional control variable for financial depth: domestic credit provided by the banking sector (in per cent of GDP) in the target country and the acquiring country (column 4). Financial depth (especially in the acquiring country) is expected to be a major determinant of cross‐border M&As (Di Giovanni, ; Hyun and Kim, ). Our results indicate that domestic credit has the expected positive but marginally significant ( p ‐value = 5.5) impact on outward cross‐border M&As.…”

Section: Robustness Analysismentioning

confidence: 99%

How do Cross‐Border Mergers and Acquisitions Answer to Deregulation in Services?

Boudier

Lochard

2013

World Economy

View full text Add to dashboard Cite

Whereas competition in the manufacturing sector was progressively ensured beginning with the end of the Second World War, services have been progressively opened to international competition only since the late 1980s and are still among the most regulated sectors in OECD countries. In this paper, we analyse the impact of deregulation in that sector on cross‐border mergers and acquisitions (M&As) in services. We find that deregulation favours inward M&As in services. This positive effect occurs through two channels: a reduction in entry costs and an increase in investment opportunities. On the other hand, deregulation has an ambiguous impact on outward M&As that depends on the initial level of regulation in the acquiring country. In particular,we provide some evidence of a U‐shaped relationship between deregulation and outward M&As in the service sector. In countries that are initially highly deregulated,deregulation fosters outward M&As. Conversely, in situations in which government control is large, privatisation and deregulation are likely to reduce the incentive for firms to engage in cross‐border M&A deals.

show abstract

“…Although it has been applied mostly to international trade, there is a more recent literature adapting this model to financial flows (Eaton and Tamura 1994;De Ménil 1999;Portes et al 2001;Portes and Rey 2005) and M&A activities (Ashcroft et al 1994;Di Giovanni 2005;Delannay and Méon 2006;Hyun and Kim 2010). To our knowledge, this is the first analysis implementing a gravity model in a law and finance context.…”

Section: Recent Legislation Indicates That European Jurisdictions Actmentioning

confidence: 99%

Where do firms issue debt? An empirical analysis of issuer location and regulatory competition in Europe

Eidenmüller

Engert

Hornuf

2015

International Review of Law and Economics

View full text Add to dashboard Cite

In this article, we study the choice of issuer location and regulatory competition in the European corporate debt market. We fi nd that, in absolute terms, Germany has by far the highest outfl ow of debt issues, while the Netherlands, the UK, Luxembourg and Ireland see the most infl ows (in that order). We use a panel gravity model to investigate country specifi c factors attracting foreign subsidiaries as issuer. The data clearly support the prediction that the locational choice is positively infl uenced by a low withholding tax rate. There is also some evidence that corporate tax rates play a role. We do not fi nd support for creditor protection rules in bankruptcy as a driver of cross-border debt securities issues. Hence, countries who wish to attract issuers are well-advised to reduce their withholding tax rates -creditor rights seem not to matter.

show abstract

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

Cited by 66 publications

References 26 publications

Symmetric and asymmetric effects of proximities. The case of M&A deals in Italy

Symmetric and asymmetric effects of proximities. The case of M&A deals in Italy

How do Cross‐Border Mergers and Acquisitions Answer to Deregulation in Services?

Where do firms issue debt? An empirical analysis of issuer location and regulatory competition in Europe

Contact Info

Product

Resources

About