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Published October 2021 | public
Journal Article Open

International Trade and the Propagation of Merger Waves


Cross-border merger activity is growing in importance. We map the global trade network each year from 1989 to 2016 and compare it to cross-border and domestic merger activity. Trade-weighted merger activity in trading partner countries has statistically and economically significant explanatory power for the likelihood that a given country will be in a merger wave state, at both the cross-border and domestic levels, even controlling for its own lagged merger activity. The role of trade as a channel for transmitting merger waves is confirmed using import tariff cuts and trade sanctions as instruments to mitigate endogeneity. Overall, the full trade network helps our understanding of merger waves and how merger activity propagate across borders.

Additional Information

© The Author(s) 2020. Published by Oxford University Press on behalf of The Society for Financial Studies. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model). Received: 02 October 2018; Published: 07 September 2020. We thank David Denis (editor), two anonymous referees, Kathryn Dewenter, Ran Duchin, Espen Eckbo, Andrey Golubov, Jonathan Karpoff, Pedro Matos, Vikas Mehrotra, Gordon Phillips, Andreas Stathopoulos, Fei Xi, Paolo Volpin, brown bag participants at the University of Washington, seminar participants at the Nanyang Technology University, University of Arizona, George Mason University, Univsity of Lille, SKEMA Business School, Rennes School of Business, Caltech, Tsinghua University, George Washington University, Lancaster University, and conference participants at 2017 SFS Cavalcade in Nashville, 2017 French Finance Association (AFFI) in Valence, 2017 FMA Europe in Lisbon, 2017 CICF in Hangzhou, 2017 NFA in Halifax, 2017 Second Annual Cass Mergers and Acquisitions Research Centre conference in London, 2018 FMA Asia Pacific in Hong Kong, 2018 WFA in San Diego, 2018 EFA in Warsaw for useful comments and suggestions. Supplementary data can be found on The Review of Financial Studies web site.

Attached Files

Submitted - SSRN-id2955638.pdf

Supplemental Material - hhaa104_supplementary_data.pdf


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August 22, 2023
September 11, 2023