2017/13 LEM Working Paper Series

Spatio-Temporal Patterns of the International Merger and Acquisition Network

Marcos Duenas, Rossana Mastrandrea, Matteo Barigozzi, Giorgio Fagiolo
International Economics; Mergers and Acquisitions; Network Analysis; Geographical Distance

  JEL Classifications
C40; F21; F40

This paper analyzes the world web of mergers and acquisitions (M&As) using a complex network approach. We use data of M&As to build a temporal sequence of binary and weighted-directed networks, for the period 1995-2010 and 224 countries. We study different geographical and temporal aspects of the international M&As network (IMAN), building sequences of filtered sub-networks whose links belong to specific intervals of distance or time. Given that M&As and trade are complementary ways of reaching foreign markets, we perform our analysis using statistics employed for the study of the international trade network (ITN), highlighting the similarities and differences between the ITN and the IMAN. In contrast to the ITN, the IMAN is a low density network characterized by a persistent giant component with many external nodes and low reciprocity. Clustering patterns are very heterogeneous and dynamic. High-income economies are the main acquirers and are characterized by high connectivity, implying that most countries are targets of a few acquirers. Like in the ITN, geographical distance strongly impacts the structure of the IMAN: link-weights and node degrees are strongly non-linear, and an assortative pattern is present at short distances.
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