Firm-Level Variables Affect Cross-Border Mergers and Acquisitions from BRICS Countries: Binary Logistic Regression Analysis

Abstract

This research explores the firm-level drivers of cross-border Mergers and Acquisitions (M&A) within the BRICS nations, focusing on characteristics such as size, profitability, leverage and operational efficiency. Using a unique dataset of 157 firms from 2004 to 2023 and employing binary logistic regression analysis, the study finds that market capitalisation and return on assets significantly increase the likelihood of M&A activity, while higher tax rates act as a deterrent. Leverage also shows a positive association, indicating that firms strategically use debt to finance international expansion. By highlighting the critical role of financial health and tax efficiency in shaping Outward Foreign Direct Investment (OFDI), the study provides actionable insights for corporate leaders and policymakers. Unlike prior research that primarily examined macroeconomic or country-level factors, this paper advances understanding on cross-border M&A by focusing on the firm-specific determinants of M&A in emerging economies.

JEL Codes: G34, G32, F21, O16

Keywords

Cross-border Mergers and Acquisitions Firm-level Factors Outward Foreign Direct Investment Economic Development

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