We combine the resource curse literature with the literature on cross-border mergers and acquisitions (M&As) to investigate two hypotheses, namely (i) countries with a comparative advantage in natural resources attract more M&As in natural resource intensive sectors and (ii) countries with a high natural resource dependency attract fewer M&As in other sectors. Using the Thomson dataset we test these hypotheses for a sample of 49 African and Latin American countries in the period 1988 - 2007. Both hypotheses were confirmed by our findings. Thus, resource dependency has a “crowding out” effect on M&As in sectors not intensive in natural resources, and a comparative advantage in natural resources has a “crowding in” effect on M&As in sectors intensive in natural resources.

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Tinbergen Institute
Tinbergen Institute Discussion Paper Series
Discussion paper / Tinbergen Institute
Tinbergen Institute

Swart, J., & van Marrewijk, C. (2009). Cross-Border Mergers & Acquisitions: A Piece of The Natural Resource Curse Puzzle (No. TI-2009-053/2). Discussion paper / Tinbergen Institute. Retrieved from http://hdl.handle.net/1765/16302