What Drives the Global Outward Mergers & Acquisitions? Empirical Analysis on Indian Outbound Deals

Sheeba Kapil, Puneet Kaur Dhingra

Abstract


The need for new markets, new customers, global markets and competitive advantages and many identified and unidentified factors drive to acquire businesses in other countries. Indian firms count to involve in outbound cross M&A activities in last two decades (2000-2020). This paper purposes to study the impact of different possible factors related to host countries for example country-specific macroeconomic determinants influencing the overseas mergers and acquisitions by Indian enterprises. The study identified top 10 host country destinations along with their macroeconomic factors for a period of 20 years. Panel data regression model are used to examine the impact of selected variables on deal volume of outbound M&A by Indian firms. The dynamic effects are also observed in the relationship explaining the deal volume. The variables, gross domestic product, total exports, total imports, merchandise trade and double taxation treaty were found to have significant impact on Indian outbound M&A transactions. This paper fulfills the research gap by explaining the impact of different host macroeconomic factors attracting Indian firms to make foreign acquisitions.

Keywords: Indian Mergers & Acquisitions, Cross-Border Outbound Investments, Host Country Macroeconomic Drivers, Business overseas.


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