Innovative mergers and acquisitions and the broker regions of European integration

Cross-regional mergers and acquisitions (M&A) transfer control and diffuse knowledge across space, which facilitates the integration of business systems. We analyse about 40,000 cross-regional acquisitions in Europe completed between 2003 and 2017 and distinguish innovative and non-nnovative M&A. Both types of deals cluster into communities constituted by countries or groups of neighbouring countries. However, an increasing proportion of deals connect different communities, especially for innovative M&A. More populous and richer regions host more acquiring and target companies and thus broker communities. Research and development expenditure and skilled human capital are additional factors favouring brokerage of regions by attracting acquirers.