DP12078 Cross-Border Mergers and Acquisitions: Evidence from the Indochina Region

Author(s): Manapol Ekkayokkaya, Pimnipa Foojinphan, Christian C Wolff
Publication Date: June 2017
Keyword(s): colonial history, Foreign direct investment, South-East Asia
JEL(s): F54, G15, G34
Programme Areas: Financial Economics, International Trade and Regional Economics, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12078

We study cross-border mergers and acquisitions (M&As) in ten countries in the Indochina region during the period 1993-2015. Countries with a French colonial history showed markedly lower levels of cross-border M&As (value as well as volume) than other countries, whether previously colonized or not. This difference persists even after accounting for the known drivers of cross-border M&A activity, including legal origin, trade openness, and labor cost levels. Together, these findings suggest that the colonial past of a country plays an important role in cross-border M&A activity.