A Note on Cross-Border Mergers and Investment

Moore, Winston and Stephen, Jeremy (2006): A Note on Cross-Border Mergers and Investment.

Abstract

The theoretical literature suggests that there should be a bi-directional relationship between investment and mergers. This essay uses homogenous and heterogeneous panel Granger causality tests to examine this hypothesis. The paper finds that in high-income countries, cross-border mergers tend to Granger cause investment, while in low- to middle-income countries, investment Granger causes mergers.

• Item Type: MPRA Paper
• Language: English
• Keywords: Mergers, Investment, Causality, Panel Data
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance

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