THE INFLUENCE OF HOME COUNTRY MACROECONOMIC FACTORS ON INWARD CROSS-BORDER MERGERS AND ACQUISITIONS: THE CASE OF ROMANIA

Expanding abroad and entering on foreign markets is a natural step in the process of growth and development of firms. Cross-border mergers and acquisitions represent, currently, an important tool in the competitive struggle, which is increasingly intense due to the globalization of economies, and also the driving force behind the growth of Foreign Direct Investments (FDI) flows globally. In Romania, the share of cross-border mergers and acquisitions inflows in the total FDI inflows increased progressively, reaching 46,6% in 2006, when the highest value of these transactions was registered (5.308 million dollars, according to UNCTAD). The aim of this empirical research is to study the correlation between the number of inward cross-border mergers acquisitions and a series of other variables, considered factors of influence, over the period 1992-2013. Using simple regression models, the study reveals that economic factors such as Gross domestic product (GDP), stock market capitalization (as a percentage of GDP), interest rate, exchange rate, M2 monetary aggregate and inflation have an important role in explaining cross-border mergers and acquisitions inflows. Between the number of inward cross-border mergers and acquisitions and GDP, M2 monetary aggregate, market capitalization, respectively the exchange rate, there is a direct and linear correlation and between the number of inward mergers and acquisitions and the interest rate, respectively the inflation, there is an inverse linear correlation. The research conducted reveals the important role played by macroeconomic factors with regard to the cross-border mergers and acquisitions inflows, as an entry mode of FDI in Romania