Location Choices of Multinational Firms: The Case of Mergers and Acquisitions

This article examines the location choices of cross-border Mergers andAcquisitions (M&A) between OECD members' firms in the 1990's. In addition totraditional determinants of FDI, we estimate the impact of specific factorsaffecting the M&A location pattern. Two distinct econometric methods areimplemented: the conditional logit and the count model. We find that the supply oftarget firms constrains the location of M&A. However, it is not the onlydeterminant of location: the market size, the labor cost, the market access and thefinancial openness play a positive and significant role in the M&A location. Abandwagon effect is also observed. In the opposite, the corporate tax rate and theproductivity decrease the probability to attract M&A. Cultural and geographicdistances as well as differences in legal rules exert a negative significant impacton M&A strategies too. Only the ownership structure has contrasted results. Olivier Bertrand : GREMAQ - Universit de Toulouse 1, Manufacture des Tabacs - B timent F - 21Ale de Brienne, 31000, Toulouse (France); E-mail: olivier.bertrand@univ-tlse1.frJean-Louis Mucchielli: TEAM - University of Paris 1 Panthon-Sorbonne and CNRS. Maison desSciences Economiques, 106-112, Bd de I’H pital - 75647 Paris Cedex 13. E-mail: jlmuc@univ-paris1.fr182 Olivier Bertrand, Jean-Louis Mucchieli, and Habib ZitounaJEL classification: F23, L1, R3 KCI Citation Count: 1