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Mergers and acquisitions & trade: A global value chain analysis
Author(s) -
CarrilCaccia Federico,
Pavlova Elena
Publication year - 2020
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12882
Subject(s) - openness to experience , value (mathematics) , economics , international economics , position (finance) , bilateral trade , international trade , gravity equation , destinations , gravity model of trade , monetary economics , psychology , social psychology , tourism , finance , machine learning , computer science , law , political science , china
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.