Location and Determinants of Cross-Border Mergers & Acquisitions within the United States

January 2014. Preliminary version, please do not quote without permission

As opposed to greenfield investments, for acquiring firms engaged in mergers & acquisitions (M&As) the choice of targets is bounded by the location of existing establishments. We adapt the model of Guadalupe et al. (2012) to include the  M&A location-target decision explicitly. Using a very detailed firm level data set for manufacturing M&As in the USA for the period 1985-2012, we focus on the difference between cross-border M&As and national M&As and first establish that cross-border M&As are more spatially concentrated, we also find that cross-border M&As sort into larger agglomerations across the USA. With respect to the determinants of cross-border M&As, our estimations indicate that a good market access in the USA as well as, through the vicinity of an international airport, access to the rest of the world is a key driver for the US location of acquiring foreign firms.  Joint with Steven Brakman and Charles van Marrewijk.

Keywords: FDI,  cross-border mergers and acquisitions,  spatial concentration, market access

JEL code: F10, F12, L13