Financial Depth and Cross-Border M&A Activity

The cross-border M&A activity has become a highly popular form of corporate activity, and it has become one important type of the foreign direct investment (FDI) as well. The objective of this paper is to examine the consequence of financial depth and the cross-border M&A activity. One of the questions this paper tries to answer is whether the depth of financial markets and other institutional factors play key roles in the M&A decision of firms? We also examine whether the different financial systems and legal systems affect M&A behavior.