The impact of European integration on the nineties' wave of mergers and acquisitions

The present paper applies a gravity model with fixed country effects to M&A flows on a sample of 1215 pairs of countries over the 1998-2001 period, to test the impact of European integration. That model, which had to our knowledge not been applied to M&A flows so far, allows us to observe that the participation of two countries in the process of European integration is associated with a smaller negative impact of distance on the number and the value of those countries’ bilateral M&A flows. We observe no such effect for the EMU however.