Gan & Qiu (2019)

Question 1

What is cross border M&A driven by

Answer 1

cross-border M&As may be driven by differences in a number of important factors. These include country-level legal and institutional environments, cultural values, currencies and equity market valuations, economic development.

• For example, Alimov (2015) finds that countries that tighten employment regulations attract more foreign acquirers from countries with more flexible labor regulations.
• Multinational companies with operations in tax havens tend to reduce the transparency of their tax- avoidance activities by aggregating their geographical disclosures.
• Countries with high international double taxation of foreign-source income attract a smaller number of parent firms. Increase in the local tax rate generally discourages FDI.