Economic Nationalism in Mergers and Acquisitions

Charles A. Dice Center Working Paper No. 2009-24

Fisher College of Business Working Paper No. 2009-03-024

75 Pages Posted: 24 Mar 2009 Last revised: 24 May 2012

See all articles by Serdar Dinc

Serdar Dinc

Rutgers University

Isil Erel

Ohio State University (OSU) - Department of Finance

Date Written: May 18, 2012

Abstract

This paper studies the government reaction to large corporate merger attempts in the European Union during 1997-2006 using hand-collected data. It documents widespread economic nationalism in which the government prefers the target companies remain domestically owned rather than foreign-owned. This preference is stronger at times and places with strong far-right parties, weaker governments, and against countries for which the people in the target country have little affinity. This nationalism has both direct and indirect economic impact on mergers and impedes capital flows. In particular, nationalist government reactions deter foreign companies from bidding for other companies in that country in future.

Keywords: Protectionism, Patriotism, National Champions, Too-Big-To-Be-Acquired,Government Intervention, International Capital Flows

JEL Classification: G34, G30, F52

Suggested Citation

Dinc, Serdar and Erel, Isil, Economic Nationalism in Mergers and Acquisitions (May 18, 2012). Charles A. Dice Center Working Paper No. 2009-24. Available at SSRN: https://ssrn.com/abstract=1361107

Serdar Dinc

Rutgers University ( email )

111 Washington Avenue
Newark, NJ 07102
United States

HOME PAGE: http://serdardinc.com

Isil Erel (Contact Author)

Ohio State University (OSU) - Department of Finance ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

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