Home country macroeconomic factors on outward cross-border mergers and acquisitions: Evidence from the UK
In this paper, we examine the dynamic effects of key macroeconomic factors on the UK crossborder mergers and acquisitions (CBM&A) outflows over the period 1987–2008. Using a seven variable vector autoregressive/vector error correction models (VAR/VECM), the study finds that a number of home country macroeconomic variables, including GDP, broad money supply, stock prices and real effective exchange rate exert a positive and significant influence in explaining the CBM&A outflows by the UK firms. However, inflation rates and interest rates tend to have a negative impact on the volume of CBM&A. The findings support the notion that home country macroeconomic factors can create advantages to improve the outward Cross-border M&A activities.
Citation : Boateng, A., Hua, X., Uddin, M. and DU, M. (2014) Home Country Macroeconomic Influences on Outward Cross-border Mergers and Acquisitions: Evidence from the UK. Research in International Business and Finance, 30, pp.202-216.
ISSN : 0275-5319
Research Institute : Finance and Banking Research Group (FiBRe)
Peer Reviewed : Yes