Mergers and Acquisitions & Trade: A Global Value Chain Analysis

29 Pages Posted: 7 Jun 2020

See all articles by Federico Carril

Federico Carril

University of Granada

Elena Pavlova

European Union - European Commission

Date Written: March 2020

Abstract

The present paper deals with how the insertion in international trade and global value chains (GVCs) of countries affects their capacity of attracting foreign mergers and acquisitions (M&As). To this end, we combine data for bilateral M&As and trade in value added for the period 2001–15 and estimate an augmented gravity equation. Results indicate that trade openness per se does not favour M&As. Nevertheless, bilateral free trade agreements, heterogeneity of destinations (sources) for exports (imports) of intermediate and final goods, and position and participation in global value chains are relevant for explaining bilateral M&As. Moreover, their role is significantly different depending on the level of development of the home and host countries.

Keywords: global value chains, gravity model, M&As, trade in value added, trade openness

Suggested Citation

Carril, Federico and Pavlova, Elena, Mergers and Acquisitions & Trade: A Global Value Chain Analysis (March 2020). The World Economy, Vol. 43, Issue 3, pp. 586-614, 2020, Available at SSRN: https://ssrn.com/abstract=3621026 or http://dx.doi.org/10.1111/twec.12882

Federico Carril (Contact Author)

University of Granada ( email )

C/Rector López Argueta S/N
Granada, Granada 18071
Spain

Elena Pavlova

European Union - European Commission ( email )

Rue de la Loi 200
Brussels, B-1049
Belgium

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