Abstract
Indian enterprises have succeeded in climbing the ladder of outward M&A transactions and out performing everyone's expectations post 1990s. This paper aims to recalibrate the empirical literature of India's outbound M&A by considering the impact of host market size, appreciation in home currency, India's trade openness and liberalization policies. This study attempts to examine the impact of the host market size, home international reserves and trade openness along with home currency appreciation on the volume of the outbound M&A by Indian firms, using augmented autoregressive distributed lag (augmented ARDL) bounds testing approach. Findings reveal that appreciation of Indian rupee and liberal norms towards trade, i.e. import and export both will inevitably benefit or push the Indian firms to acquire foreign firms overseas, in the short term as well as over the long term. This paper makes an effort to identify and describe the significant factors influencing the outbound M&A deals by Indian firms in the recent years, which were previously proved relevant for group of emerging economies at large.Keywords: Outbound M&A; India, OFDI, DeterminantsJEL Classiï¬cations: F21, F23, P45, G34DOI: https://doi.org/10.32479/ijefi.11715
Highlights
World’s economy has witnessed mammoth changes in the pattern and structure of international investment with an increasing participation from firms from developing economies during 2000s
This paper aims to test the relevance of previously studied macroeconomic determinants and describe their significance influencing the outbound Mergers and Acquisitions (M&A) deals by Indian firms in the current scenario
OFDI Developing economies contributed a share of 6.2% in 1990 to total stock of world’s OFDI, and this contribution rose to 9.3% in 2000, and further escalated to 14.8% in 2010
Summary
World’s economy has witnessed mammoth changes in the pattern and structure of international investment with an increasing participation from firms from developing economies during 2000s. This phenomenon of emerging MNCs from developing economies isn’t new and has been a central theme in the research work of Lall (1983), but the transformation in the last two decades has been beyond anyone’s anticipation. Post 1990s, OFDI of firms from emerging economies spiked, drawing everyone’s attention towards it. Among these developing nations, Indian firms made a distinguished mark via magnitude of its overseas investments. This paper aims to test the relevance of previously studied macroeconomic determinants and describe their significance influencing the outbound M&A deals by Indian firms in the current scenario
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