Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions

This article, to date, is the first to consolidate, review, and integrate over 250 earlier studies that examine the country-specific determinants of cross-border mergers and acquisitions. Following 6Ws’ systematic review design and protocol, we survey the taxonomy of research published over the past three decades in international business, strategic management, finance, and economics. We present our syntheses in seven strands: macroeconomic and financial markets environment, institutional and regulatory environment, political environment and corruption, tax and the taxation environment, accounting standards and valuation guidelines, cultural environment, and geographical environment. Our integrative review and discussions are framed through Home–Host country, West–South, and South–West directional flows. We then show some highlights of the bibliometric analysis, provide a summary for each country-level determinant, and offer several theoretical propositions and research directions in need of future exploration. The review suggests that better the host country’s institutional laws with regard to financial markets, taxation and corporate governance, then higher the number of inward acquisitions. It emphasizes that geopolitical distance, regulatory distance, and cultural distance between developed and developing economies are more likely to be moderated by the target country’s market size, natural resources base, and weak institutional laws, especially corporate tax and capital gains tax. Overall, the article contributes to institutional framework and political economy view of globalized production by reviewing the crucial research question – what determines cross-border merger and acquisition transactions around the world?