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The impact of cross-border mergers on investment

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  • Winston Moore

Abstract

This article examines the empirical link between mergers and investment using a panel of 61 developed and developing countries between 1987 and 2001. The results indicate that, on average, a rise in cross-border merger and acquisition activity tends to reduce investment. However, in high-income countries, the number of mergers had a positive impact on investment. This finding could be due to stock market inefficiencies in these low- to middle-income countries.

Suggested Citation

  • Winston Moore, 2008. "The impact of cross-border mergers on investment," Applied Economics Letters, Taylor & Francis Journals, vol. 15(12), pages 981-984.
    • Handle: RePEc:taf:apeclt:v:15:y:2008:i:12:p:981-984
    DOI: 10.1080/13504850600972212
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    References listed on IDEAS

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    1. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    2. Serven, Luis, 1998. "Macroeconomic uncertainty and private investment in developing countries - an empirical investigation," Policy Research Working Paper Series 2035, The World Bank.
    3. Boyan Jovanovic & Peter L. Rousseau, 2002. "The Q-Theory of Mergers," American Economic Review, American Economic Association, vol. 92(2), pages 198-204, May.
    4. George Bittlingmayer, 1996. "Merger and the returns to labour and investment," Applied Economics Letters, Taylor & Francis Journals, vol. 3(3), pages 145-148.
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