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Who acquires whom? The role of geographical proximity and industrial relatedness in Dutch domestic M&As between 2002 and 2008

Author

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  • Ellwanger , Nils

    (APE BV, Den Haag)

  • Boschma , Ron

    (Center for Innovation and Research and Competence in the Learning Economy (CIRCLE), Lund University, Sweden, and Utrecht University,Urban and Regional research centre Utrecht (URU), The Netherlands)

Abstract

In economic geography, geographical proximity has been identified as a key driver of M&A activity. In this context, little attention has yet been drawn to the effect of industrial relatedness, which refers to the similarity and complementarity of business activities. We examine 1,855 domestic M&A deals announced between 2002 and 2008 in the Netherlands, and we assess the extent to which geographical proximity and industrial relatedness affect M&A partnering. Our study shows that geographical proximity drives domestic M&A deals, even at very detailed spatial scales like the municipality level. We also found evidence that companies that share the same or complementary industries are more likely to engage in an M&A deal. Logistic regressions show that the effect of industrial relatedness is stronger than the effect of geographical proximity and that the effect of geographical proximity is stronger in unrelated than related target selection.

Suggested Citation

  • Ellwanger , Nils & Boschma , Ron, 2014. "Who acquires whom? The role of geographical proximity and industrial relatedness in Dutch domestic M&As between 2002 and 2008," Papers in Innovation Studies 2014/30, Lund University, CIRCLE - Centre for Innovation Research.
    • Handle: RePEc:hhs:lucirc:2014_030
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    References listed on IDEAS

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    Cited by:

    1. Marie Ferru & Alain Rallet, 2016. "Proximity dynamics and the geography of innovation: diminishing returns or renewal?," Post-Print hal-02025328, HAL.
    2. Ron Boschma & Emanuela Marrocu & Raffaele Paci, 2016. "Symmetric and asymmetric effects of proximities. The case of M&A deals in Italy," Journal of Economic Geography, Oxford University Press, vol. 16(2), pages 505-535.
    3. Fedoua Kasmi, 2021. "Industrial Symbiosis and Territorial Development: The Cross-Fertilization of Proximity Dynamics and the Role of Information and Knowledge Flows," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(1), pages 342-362, March.
    4. McCarthy, Killian J. & Aalbers, Hendrik Leendert, 2016. "Technological acquisitions: The impact of geography on post-acquisition innovative performance," Research Policy, Elsevier, vol. 45(9), pages 1818-1832.
    5. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2014. "Trust your neighbour. Industrial relatedness, social capital and outsourcing," Papers in Evolutionary Economic Geography (PEEG) 1403, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2014.

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    More about this item

    Keywords

    Mergers and acquisitions; Netherlands; geographical proximity; home bias; industrial relatedness;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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