{
  "title": "Network Determinants of Cross-Border Merger and Acquisition Decisions",
  "publication": "IMF Working Papers, December 4, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2019/12/04/network-determinants-of-cross-border-merger-and-acquisition-decisions-48646",
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  "summary": "This paper assesses whether cross-border M&A decisions exhibit network effects. We estimate exponential random graph models (ERGM) and temporal exponential random graph models (TERGM) to evaluate the determinants of cross-country M&A investments at the sectoral level.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Title: Network Determinants of Cross-Border Merger and Acquisition Decisions\n- Authors: Tatiana Didier, Sebastian Herrador, Magali Pinat\n- Date: December 4, 2019\n- Abstract summary: Assesses whether cross-border M&A decisions exhibit network effects by estimating exponential random graph models (ERGM) and temporal exponential random graph models (TERGM) at the sectoral level."
    },
    {
      "heading": "Methods",
      "content": "- Estimation approaches:\n  - Exponential random graph models (ERGM)\n  - Temporal exponential random graph models (TERGM)\n- Unit of analysis: cross-country M&A investments at the sectoral level"
    },
    {
      "heading": "Key findings",
      "content": "- Transitivity matters:\n  - A country is more likely to invest in a new destination if one of its existing partners has already made some investments there.\n- Third-country (informational/platform) effects:\n  - There is a sizable impact of third country effects on the creation of new investments.\n  - This third-country effect is sizable and larger than some traditional M&A determinants, such as trade openness.\n- Alignment with existing literature:\n  - Findings are in line with literature on export platforms and informational barriers."
    },
    {
      "heading": "Policy implications / Recommendations",
      "content": "- Consider network effects when designing policies to attract or regulate cross-border M&A:\n  - Policies that facilitate information sharing or lower informational barriers across partner countries may encourage new investment links.\n  - Leveraging existing investor relationships (third-country connections) could be more effective than focusing solely on traditional determinants like trade openness.\n- Sectoral targeting:\n  - Sector-level network dynamics suggest tailored approaches by sector may be warranted when aiming to influence cross-border M&A flows.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2019/12/04/network-determinants-of-cross-border-merger-and-acquisition-decisions-48646"
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    "Authors: Tatiana Didier, Sebastian Herrador, Magali Pinat",
    "Published: December 4, 2019",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513512556.001",
    "Title: Network Determinants of Cross-Border Merger and Acquisition Decisions",
    "Authors: Tatiana Didier, Sebastian Herrador, Magali Pinat",
    "Date: December 4, 2019",
    "Abstract summary: Assesses whether cross-border M&A decisions exhibit network effects by estimating exponential random graph models (ERGM) and temporal exponential random graph models (TERGM) at the sectoral level.",
    "Estimation approaches:",
    "Unit of analysis: cross-country M&A investments at the sectoral level",
    "Transitivity matters:",
    "Third-country (informational/platform) effects:",
    "Alignment with existing literature:",
    "Consider network effects when designing policies to attract or regulate cross-border M&A:",
    "Sectoral targeting:",
    "**Working Paper**"
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