TY - JOUR
T1 - The Location of Cross-Border and National Mergers and Acquisitions within the United States
AU - Brakman, Steven
AU - Garretsen, Harry
AU - van Marrewijk, Charles
AU - van Witteloostuijn, Arjen
N1 - Funding Information:
We would like to gratefully thank the editor, coeditor, and three anonymous referees for their very useful comments and suggestions. We also thank Julia Swart for assistance with the Thomson data, and Sjoerd Beugelsdijk, Cristian Bogmans, Marius Brülhart, Keith Head, Peter Neary, Enrico Pennings, Klaus DeSmet, Mark Partridge, Bart Los, Alexander Whalley, and participants at various conferences and seminars for their useful feedback. Please send all correspondence to [email protected], Utrecht University, PO Box 80125, 3508 TC, Utrecht, The Netherlands.
Publisher Copyright:
© 2022 The Authors. Journal of Economics & Management Strategy published by Wiley Periodicals LLC.
PY - 2023/1/1
Y1 - 2023/1/1
N2 - Research on the location choice of foreign direct investment (FDI) focuses on the choice between countries. The within-country location choice is either not analyzed at all or restricted to greenfield investments only. The majority of FDI, however, takes the form of cross-border mergers and acquisitions (M&As). We develop and test a pair of hypotheses regarding location-target selection for both cross-border and national M&As across the United States, expecting differences in line with the liability of foreignness argument. Using a detailed firm-level data set for M&As in the period 1985–2012, we compare location choices of cross-border versus national M&As. We find that cross-border M&As are more spatially concentrated, and tend to sort into larger agglomerations than national M&As. This finding holds both for urban agglomerations in isolation, as well as for agglomerations that take the economic geography of the United States into account.
AB - Research on the location choice of foreign direct investment (FDI) focuses on the choice between countries. The within-country location choice is either not analyzed at all or restricted to greenfield investments only. The majority of FDI, however, takes the form of cross-border mergers and acquisitions (M&As). We develop and test a pair of hypotheses regarding location-target selection for both cross-border and national M&As across the United States, expecting differences in line with the liability of foreignness argument. Using a detailed firm-level data set for M&As in the period 1985–2012, we compare location choices of cross-border versus national M&As. We find that cross-border M&As are more spatially concentrated, and tend to sort into larger agglomerations than national M&As. This finding holds both for urban agglomerations in isolation, as well as for agglomerations that take the economic geography of the United States into account.
KW - Agglomeration economies
KW - Assignment models
KW - Comparative advantage
KW - Fdi
KW - Foreign direct-investment
KW - Geographic concentration
KW - Manufacturing-industries
KW - Multinational firms
KW - Performance
KW - Subnational region matter
UR - http://www.scopus.com/inward/record.url?scp=85138309399&partnerID=8YFLogxK
U2 - 10.1111/jems.12501
DO - 10.1111/jems.12501
M3 - Article
SN - 1058-6407
VL - 32
SP - 177
EP - 206
JO - Journal of Economics and Management Strategy
JF - Journal of Economics and Management Strategy
IS - 1
ER -