Mergers and Acquisitions in Latin America: Industrial Productivity and Corporate Governance

AbstractThis paper examines the impact of industrial productivity in the country of origin on transnationals M&As, directed from OECD countries towards Latin America in the period 1996–2010. It also analyzes the relationship between external mechanisms of corporate governance and transnational M&As. Employing a gravitational model at the industry level, we find that industry productivity in the country of origin promotes transnational M&A activity, although capital productivity affects it negatively. We also find evidence that higher standards of corporate governance in both origin and destination countries increase the likelihood of transnational M&As taking place.