Home country macroeconomic factors on outward cross-border mergers and acquisitions: Evidence from the UK

Boateng, Agyenim; Hua, Xiuping; Uddin, Moshfique; Du, Min

Abstract

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., & Du, M. (2014). Home country macroeconomic factors on outward cross-border mergers and acquisitions: Evidence from the UK. Research in International Business and Finance, 30, 202-216. https://doi.org/10.1016/j.ribaf.2013.08.001

• Journal Article Type: Article
• Acceptance Date: Aug 5, 2013
• Online Publication Date: Aug 19, 2013
• Publication Date: 2014-01
• Deposit Date: Dec 10, 2021
• Journal: Research in International Business and Finance
• Print ISSN: 0275-5319
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 30
• Pages: 202-216
• DOI: https://doi.org/10.1016/j.ribaf.2013.08.001
• Keywords: Cross-border, Mergers and acquisitions, Macroeconomic factors, VAR/VECM, UK
• Public URL: http://researchrepository.napier.ac.uk/Output/2828623