Impact of Terrorism on Cross-Border Mergers and Acquisitions (M&As): Prevalence, Frequency and Intensity

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• 作者：Alice Y. Ouyang ; Ramkishen S. Rajan
• 关键词：Foreign direct investment (FDI) ; Institutions ; Mergers and acquisitions (M&As) ; Spillovers ; Terrorism
• 刊名：Open Economies Review
• 出版年：2017
• 出版时间：February 2017
• 年：2017
• 卷：28
• 期：1
• 页码：79-106
• 全文大小：
• 刊物类别：Business and Economics
• 刊物主题：International Economics; Development Economics; European Integration; Macroeconomics/Monetary Economics//Financial Economics; Economic Policy;
• 出版者：Springer US
• ISSN：1573-708X
• 卷排序：28

文摘

This paper contributes to the literature on the impact of terrorism on international business by focusing on the specific case of cross-border mergers and acquisitions (M&As) using bilateral data for 59 countries over the period 2000–2011. We are interested in the following set of questions: (a) the impact of source and host country terrorism on bilateral M&A flows using various measures of terrorism (i.e. prevalence, frequency and intensity); (b) whether terrorism affects developing countries differently; (c) whether good institutions in developing host countries can offset the negative effects of terrorism; and (d) whether terrorism incidents in a particular economy has negative spillovers to its neighbors. To preview the main conclusions, we find that an augmented gravity model fits the data well. While the occurrence of terrorism in either the host or source does not appear to have any impact on bilateral M&A, the frequency and intensity of terrorist attacks significantly deter M&A flows, especially in the latter. We also find that good institutions negate the impact of terrorist attacks in the developing host country. There is also some evidence that regional spillovers reduce M&As in the host country.