The determinants of cross-border mergers in four selected ASEAN countries

One organization purchases a second organization and acquiring ownership rights over its assets, business lines, operations, stocks and products. Therefore, they need one act to secure what they purchase which is will call its merger and acquisitions (M&As). In this particular matter, our study attempts to investigate the role of financial development on cross-border M&As in 4 ASEAN countries, namely Indonesia, Malaysia, Singapore and Thailand. Based on period of thirteen years (2000-2012), the data were analyzed by using the panel data econometric technique; fixed-effects and random-effects models. The results of the study indicate that a number of variables such as GDP, trade costs, financial development indicators such as stock which is the market capitalization of equity market, the amount of money in circulation (M2), and the real exchange rate (RER) are significantly influential in determining cross-border M&As from the whole of selected ASEAN countries. The findings of the study reveal the importance of domestic financial markets in stimulating cross-border M&As. These results also indicate that policy makers should pay more attention to promote cross-border M&As in term of policies and emphasize towards a stable exchange rate and trade cos