Global Financial Markets, Natural Resources and Cross-Border Mergers and Acquisitions in Africa

This paper investigated the influence of global financial markets and natural resources on cross-border Mergers &Acquisitions (M&A) in Africa. With the use of a dynamic panel data model, we found that international stock markets exerted a positive and significant influence on cross-border M&A in Africa, whereas international interest rates had a negative influence. The continent’s endowment in natural resources and the high demand for commodities during the period under investigation had a significant positive effect on cross-border M&A flows in Africa. The findings further confirm that cross-border M&A in Africa are pro-cyclical and that the locational factors that attract M&A into Africa include financial development and macroeconomic stability.