Cross-border merger & acquisition activity and revealed comparative advantage in manufacturing industries
Brakman,S. Garretsen,H. van Marrewijk,C. van Witteloostuijn,A.
Brakman,S.
Garretsen,H.
van Marrewijk,C.
van Witteloostuijn,A.
Abstract
We estimate an important implication of oligopolistic international trade modeling for the predicted pattern of cross-border mergers and acquisitions (M&As). Our core argument is that cross-border M&As are, among other factors, driven by cross-country differences in comparative advantage. We find strong evidence that acquiring firms operate in industries with a comparative advantage. We also report (less pronounced) evidence that this holds for target firms as well. We therefore add another explanation, rooted in international economics, to the industrial organization literature on M&As that emphasizes efficiency and strategic motives.
Description
Date
2013
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
Organizational Units
Journal Issue
Keywords
SDG 9 - Industry, Innovation, and Infrastructure
Citation
Brakman, S, Garretsen, H, van Marrewijk, C & van Witteloostuijn, A 2013, 'Cross-border merger & acquisition activity and revealed comparative advantage in manufacturing industries', Journal of Economics & Management Strategy, vol. 22, no. 1, pp. 28-57. https://doi.org/10.1111/jems.12007