An overview of cross-border mergers and acquisitions for five countries
Cross border mergers and acquisitions (M&As) are the main force behind the surge in foreign direct investment. Yet despite its obvious quantitative importance, the reasons for cross border M&As are not well-understood. Two basic motives stand out: an efficiency motive and a strategic motive. Efficiency gains arise because takeovers increase synergy between firms that increase economies of scale or scope. Strategic gains arise if M&As change the market structure, and thus competition and profits. Together with Steven Brakman (University of Groningen) and Harry Garretsen (Utrecht School of Economics) I am currently involved in research on the size and structure of cross-border M&As, particularly their relationship with revealed comparative advantage for five countries (Australia, France, the Netherlands, the United Kingdom, and the United States). In this paper I restrict myself to providing an overview of cross-border M&As.