Economic and Institutional Determinants of Mergers & Acquisitions in BRICS, G7 and G20 Economies

Abstract

Factors contributing towards increasing the number of mergers and acquisitions (M &A) among firms and the volume of business and sales of these firms are assessed empirically based on results of the static and dynamic panel data models for BRICS, G7 and G20 countries in this investigation. While the higher rates of economic growth and foreign direct investment (FDI) contribute positively to the occurrence of M &A activities, these effects are even more prominent with greater efficiency in government institution, qualities of regulation, voice accountability and control of corruption. In the meantime, higher inflation and corporation tax rates reduce the numbers but the volumes of the M & A activities. Size of the business matters, medium or large corporations merge to exploit scale economies, to benefit from larger markets and to retain market power by operating across the globe.