Determinants of cross-border mergers and acquisitions of firms in Thailand

Abstract

In this paper, we evaluate the effects of firm-level and country-level variables on the firms’ probability of having cross-border M&A deals and the size of the deals. Our sample consists of 87 firms from SET100 Index (firms from financial industry are excluded), and the data between 2009 to 2018 is used in this paper. The results indicate that the increase in ownership advantages of the firms, namely, size and profitability raise the chance of the firms having cross-border M&A deals and the size of the deals. For country-level variables, the results agree with the gravity model that an increase in GDP of both the Thai and host country economies leads to an increase in cross-border M&A deal value. However, the increase in the distance between host countries and Thailand reduces the cross-border M&A deals’ size. The rise in average wage of host countries reduces the size of cross-border M&A deals from Thai firms, implying the efficiency motive.