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Economic Development, Institutional Quality, and the Scale Effect Puzzle of Cross-Border M&As: Evidence from a Meta-Analysis Model

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  • Chengyong Yu
  • Rui Cheng
  • Cheng Zhang
  • Huijuan Wang

Abstract

The existence of the scale effect puzzle of cross-border mergers and acquisitions (M&As) erodes the foundation of antitrust supervision and reduces large enterprises’ enthusiasm for pursuing cross-border M&As. This study investigates the puzzle of the scale effect from the perspective of economic development and institutional quality. Through the meta-analysis mean value technique and the meta-regression equation model, the study finds that the mean value of the cross-border M&A scale effect is positive and significant, indicating that cross-border M&A performance increases alongside the scale. In addition, the study provides evidence that the scale effect of cross-border M&A is declining as economic development and institutional quality increase, indicating that these factors are more conducive to small-scale companies seeking foreign acquisitions to become bigger and stronger.

Suggested Citation

  • Chengyong Yu & Rui Cheng & Cheng Zhang & Huijuan Wang, 2021. "Economic Development, Institutional Quality, and the Scale Effect Puzzle of Cross-Border M&As: Evidence from a Meta-Analysis Model," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(9), pages 2514-2541, July.
    • Handle: RePEc:mes:emfitr:v:57:y:2021:i:9:p:2514-2541
    DOI: 10.1080/1540496X.2019.1694884
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    Cited by:

    1. Keren Chen, 2022. "Industrial Policy’s Effect on Cross-Border Mergers’ Decisions—Theoretical and Empirical Analysis," Sustainability, MDPI, vol. 14(20), pages 1-25, October.

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