Cross‐border mergers and acquisitions: does the exchange rate matter? Some evidence for Canada |
| |
Authors: | George J Georgopoulos |
| |
Institution: | Economics, Atkinson Faculty of Liberal and Professional Studies, York University |
| |
Abstract: | Abstract. Theoretical and empirical studies investigating the relationship between the exchange rate and FDI have generated mixed results. Using bilateral Canadian-U.S. industry level count data on cross-border mergers and acquisitions (M&As) and conditioning on industry tariff rates, value added share of industries, industry M&A trend activity, and the number of establishments, we find evidence that a real dollar depreciation of the home currency leads to an increase in the probability of foreign M&As but only in high R&D industries. These empirical results are consistent with Blonigen's asset acquisition hypothesis. Results on European M&As of Canadian firms also lean towards this result. |
| |
Keywords: | F21 F41 |
|
|