Growth Effects of Cross-border Mergers and Acquisitions in European Transition Countries

Open access

Abstract

This paper deals with the economic effect of cross-border mergers and acquisitions on GDP per capita in European transition countries for the 2000- 2014 period. Our analysis shows that cross-border mergers and acquisitions have a negative effect on GDP per capita in the current period, whereas their lagged level positively impacts output performance. We found that transition countries characterized by a higher quality of institutional setting have achieved a positive impact on GDP per capita.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Arellano M. & Bond S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies 58(2) 277-97. https://doi.org/10.2307/2297968

  • Blundell R. & Bond S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics 87(1) 115-143. https://doi.org/10.1016/S0304-4076(98)00009-8

  • Blundell R. Bond S. & Windmeijer F. (2000). Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator IFS Working Paper (W00/12) The Institute for Fiscal Studies.

  • Botrić V. Bačić K. & Slijepčević S. (2015). FDI trade and growth in the “late reformers” post transition. Paper presented at the International Finance and Banking Conference FIBA 2015.

  • Curwin K. D. & Mahutga M. C. (2014). Foreign direct investment and economic growth: New evidence from post-socialist transition countries. Social Forces 92(3) 1159-1187. https://doi.org/10.1093/sf/sot128

  • Efendić A. Geoff P. & Adnett N. (2010). Institutions and economic performance: System GMM modelling of institutional effects in transition. Retrieved from http://riinvestinstitute.org/pdf/Efendic_et_al.pdf

  • Elkomy S. Ingham H. & Read R. (2016). Economic and political determinants of the effects of FDI on growth in transition and developing countries. Thunderbird International Business Review 58(4) 347-362. https://doi.org/10.1002/tie.21785

  • Ferraz J. C. & Hamaguchi N. (2002). Introduction: M&A and privatization in developing countries. The Developing Economies 40(4) 383-399. https://doi.org/10.1111/j.1746-1049.2002.tb00920.x

  • Hudea O. S. & Stancu S. (2012). Foreign direct investments technology transfer and economic growth: A panel approach. Romanian Journal of Economic Forecasting 15(2) 85-102.

  • IMF (2000). World economic outlook: Focus on transition economies Washington DC: International Monetary Fund.

  • Kaufmann D. Kraay A. & Mastruzzi M. (2010). The worldwide governance indicators methodology and analytical issues. World Bank Policy Research Working Paper No. 5430. Washington DC: World Bank.

  • Mehic E. Silajdzic S. & Babic-Hodovic V. (2013). The impact of FDI on economic growth: Some evidence from Southeast Europe. Emerging Markets Finance & Trade 49(1) 5-20. https://doi.org/10.2753/REE1540-496X4901S101

  • Melnyk L. Kubatko O. & Pysarenko S. (2014). The impact of foreign direct investment on economic growth: case of post communism transition economies. Problems and Perspectives in Management 12(1) 17-24.

  • Mencinger J. (2003). Does foreign direct investment always enhance economic growth? Kyklos 56(4) 491-508. https://doi.org/10.1046/j.0023-5962.2003.00235.x

  • Morrissey O. & Udomkerdmongkol M. (2012). Governance private investment and foreign direct investment in developing countries. World Development 40(3) 437-445. https://doi.org/10.1016/j.worlddev.2011.07.004

  • Papke L. E. & Wooldridge J. M. (2005). A computational trick for delta-method standard errors. Economics Letters 86 413-417. https://doi.org/10.1016/j.econlet.2004.07.022

  • Roland G. (2004). After enlargement: Institutional achievements and prospects in the new member states. In C. Detken V. Gaspar & G. Noblet (Eds.) The new EU member states-Convergence and stability (pp. 35-58). Frankfurt: European Central Bank.

  • Roodman D. (2009). How to do xtabond2: An introduction to “difference” and “system” GMM in Stata. Stata Journal 9(1) 86-136.

  • Rossi S. & Volpin P. (2004). Cross-country determinants of mergers and acquisition. Journal of Financial Economics 74 277-304. https://doi.org/10.1016/j.jfineco.2003.10.001

  • Sapienza E. (2010). Foreign direct investment and growth in Central Eastern and Southern Europe. Investigación Económica 271 99-138.

  • Silajdzic S. & Mehic E. (2016). Absorptive capabilities FDI and economic growth in transition economies. Emerging Markets Finance & Trade 52(4) 904-922. https://doi.org/10.1080/1540496X.2015.1056000

  • UNCTAD. (2003). World investment report 2003: FDI policies for development: National and international perspectives. New York and Geneva: United Nations Conference on Trade and Development.

  • Windmeijer F. (2005). A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics 126(1) 25-51. https://doi.org/10.1016/j.jeconom.2004.02.005

Search
Journal information
Cited By
Metrics
All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 402 262 22
PDF Downloads 801 665 22