Cross-Border Mergers and Acquisitions and European Integration

51 Pages Posted: 2 Jan 2009

See all articles by Nicolas Coeurdacier

Nicolas Coeurdacier

London Business School

Roberto A. De Santis

European Central Bank (ECB) - Directorate General Economics

Antonin Aviat

Paris School of Economics (PSE)

Abstract

Cross-border mergers and acquisitions activities (M&As) sharply increased over the last two decades, partly as a result of financial liberalization policies, government policies and regional agreements. In this paper, we identify some of the main forces driving M&As, using a unique database on bilateral cross-border M&As at the sectoral level (in manufacturing and services) over the period 1985-2004. The key empirical findings are: (1) EMU helped the restructuring of capital within the same sector of manufacturing activity among euro area firms; (2) joining the EU favoured both horizontal and vertical mergers; (3) policy-makers can help attract capital by reducing the corporate tax rates and the degree of product market regulations and by improving the country's financial systems; (4) the service industry has not yet fully benefited from European integration because the level of protection and barriers to entry in the services sector act as a strong deterrent to cross-border M&As in services.

Suggested Citation

Coeurdacier, Nicolas and De Santis, Roberto A. and Aviat, Antonin, Cross-Border Mergers and Acquisitions and European Integration. Economic Policy, Vol. 24, Issue 57, pp. 55-106, January 2009. Available at SSRN: https://ssrn.com/abstract=1319566 or http://dx.doi.org/10.1111/j.1468-0327.2009.00218.x

Nicolas Coeurdacier

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Roberto A. De Santis

European Central Bank (ECB) - Directorate General Economics ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

Antonin Aviat

Paris School of Economics (PSE)

48 Boulevard Jourdan
Paris, 75014 75014
France

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