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

Tinbergen Institute Discussion Paper 09-053/2

51 Pages Posted: 13 Jun 2009 Last revised: 27 Aug 2009

See all articles by Julia Swart

Julia Swart

Utrecht School of Economics

Charles van Marrewijk

Utrecht University - School of Economics

Date Written: August 18, 2009

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 resource 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.

Keywords: Gravity Equation, Mergers and Acquisitions, Natural Resources, Resource Curse

JEL Classification: F23, Q56

Suggested Citation

Swart, Julia and van Marrewijk, Charles, Cross-Border Mergers & Acquisitions: A Piece of the Natural Resource Curse Puzzle (August 18, 2009). Tinbergen Institute Discussion Paper 09-053/2. Available at SSRN: https://ssrn.com/abstract=1418568 or http://dx.doi.org/10.2139/ssrn.1418568

Julia Swart (Contact Author)

Utrecht School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands

Charles Van Marrewijk

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands
*31-(0)30-2539810 (Phone)

HOME PAGE: http://www.charlesvanmarrewijk.nl

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