The border effect on mergers and acquisitions

Abstract

Using a firm-level dataset of more than 500,000 domestic and cross-border mergers and acquisitions (M&As) for 95 countries during the period 1995-2015, we measure the level and evolution of the border effect on M&As. We find that the number and value of M&As between same-country firms is five times larger than between firms of different countries. We show that the border effect on the number and value of M&As remained constant during the period. The border effect on M&As in the European Union is substantially lower than elsewhere. We find that the border effect is lower for large investors and firms operating in the primary industry and utilities.