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Cross-Border Mergers & Acquisitions: A Piece of The Natural Resource Curse Puzzle

Author

Listed:
  • Julia Swart

    (Erasmus University Rotterdam)

  • Charles van Marrewijk

    (Utrecht University)

Abstract

We combine the resource curse literature with the literature on cross-border mergers and acquisitions (M&As) to investigate two hypotheses, namely (i) natural resources wealth: countries with a comparative advantage in natural resources attract more M&As in natural resource intensive sectors and (ii) natural resources dependency: countries with a high natural resources dependency attract fewer M&As in all sectors. Using the Thomson dataset we test these hypotheses for a sample of 49 African and Latin American countries in the period 1988 - 2007. To test these hypotheses we disaggregate the data in sectors intensive and not intensive in natural resources. We emphasize the distinction between resource dependency and wealth. Both hypotheses were confirmed by our findings. Thus, resource dependency has a “crowding out” effect on M&As in all sectors, and natural resources wealth has a "crowding in" effect on M&As in sectors intensive in natural resources.

Suggested Citation

  • Julia Swart & Charles van Marrewijk, 2009. "Cross-Border Mergers & Acquisitions: A Piece of The Natural Resource Curse Puzzle," Tinbergen Institute Discussion Papers 09-053/2, Tinbergen Institute, revised 18 Aug 2009.
    • Handle: RePEc:tin:wpaper:20090053
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    Cited by:

    1. Blanco, Luisa R., 2012. "The Spatial Interdependence of FDI in Latin America," World Development, Elsevier, vol. 40(7), pages 1337-1351.

    More about this item

    Keywords

    Gravity Equation; Mergers and Acquisitions; Natural Resources; Resource Curse;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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