International Trade and Propagation of Merger Waves

76 Pages Posted: 20 Apr 2017 Last revised: 26 Jan 2018

See all articles by Muhammad Farooq Ahmad

Muhammad Farooq Ahmad

IÉSEG School of Management

Eric de Bodt

Univ. Lille

Jarrad Harford

University of Washington

Date Written: November 18, 2017

Abstract

Cross-border merger activity is growing in importance. We map the global trade network each year from 1989 to 2016 and compare it to cross-border and domestic merger activity. Trade-weighted merger activity in trading partner countries has statistically and economically significant explanatory power for the likelihood a given country will be in a merger wave state, both at the cross-border and the domestic levels, even controlling for its own lagged merger activity. The strength of trade as a channel for transmitting merger waves varies over time and is affected by import tariffs cuts, Euro, EU, EEA, and WTO entry. Overall, the full trade network helps our understanding of merger waves and how merger waves propagate across borders.

Keywords: International Trade Merger Waves

JEL Classification: G34

Suggested Citation

Ahmad, Muhammad Farooq and de Bodt, Eric and Harford, Jarrad, International Trade and Propagation of Merger Waves (November 18, 2017). Available at SSRN: https://ssrn.com/abstract=2955638 or http://dx.doi.org/10.2139/ssrn.2955638

Muhammad Farooq Ahmad

IÉSEG School of Management ( email )

1 Parvis de La Défense
Paris, 92044
France

HOME PAGE: http://sites.google.com/site/mfarooqahmad85

Eric De Bodt (Contact Author)

Univ. Lille ( email )

1 place Déliot, BP381
59020 Lille Cedex
France
+03 20 90 74 77 (Phone)
+03 20 90 77 02 (Fax)

HOME PAGE: http://www.edebodt.net

Jarrad Harford

University of Washington ( email )

Box 353226
Seattle, WA 98195-3226
United States
206-543-4796 (Phone)
206-543-7472 (Fax)

HOME PAGE: http://faculty.washington.edu/jarrad/

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