An analysis of the inward cross-border mergers and acquisitions in the UK : a macroeconomic perspective

Loading...
Thumbnail Image

Authors

Boateng, Agyenim
Naraidoo, Ruthira
Uddin, Moshfique M.

Journal Title

Journal ISSN

Volume Title

Publisher

Wiley-Blackwell

Abstract

Most of the growth in international production over the past decade has been carried out via cross-border mergers and acquisitions. Yet previous empirical work relating to CBM&As has been confined to firm-specific factors. This is against the backdrop that researchers have not been able to develop a coherent theory explaining the increasing trends of CBM&As activity. Building on prior studies, this study attempts to extend the few existing studies by using a simple empirical nonlinear framework to analyse the number of cross-border mergers and acquisitions inflows between 1987 and 2008 into the UK from a macroeconomic perspective. The main findings are that the response of the inflow is asymmetric as there is more persistence during stock market booms versus recessions. There are asymmetries with respect to relative prices suggesting that merger inflow activity appears to be higher once the stock prices rise above a threshold level of 8% . Other factors which have significant bearing on CBM&As inflows are the rate of inflation and growth in real GDP.

Description

Keywords

Cross-border mergers and acquisitions (CBM&As), Macro-economic factors, Logistic smooth transition autoregressive (LSTAR), Nonlinear LSTAR

Sustainable Development Goals

Citation

Boateng, A, Naraidoo, R & Uddin, M 2011, 'An analysis of the inward cross-border mergers and acquisitions in the UK : a macroeconomic perspective', Journal of International Financial Management Accounting, vol. 22. no. 2, pp. 91-113.