Cross-Border Mergers and Acquisitions in Developing Countries: Evidence from Panel Data

This study attempts to investigate the role of financial development on cross-border mergers and acquisitions (M&As) in selected developing countries. Utilizing panel data econometrics technique (fixed/randomeffect model) on datasets of 10 selected developing Asian countries across 12 years ranging from 2000 - 2011, this paper shows evidence that previous year M&As, stock market capitalization, lagged variables (stock market capitalization and credit), market size, exchange rateand languageare significant in influencing cross-border M&As activities. The findings reveal the importance of domestic financial markets in stimulating cross-border M&As. It is hoped that these findings may draw attention to policy makers towards changing cross-border M&As promotional policies and emphasize towards a stable economic condition.