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Domestic, inbound and outbound M&A activity interdependence in Brazil

Deepak Kumar (Accounting and Finance, Indian Institute of Management Ranchi, Ranchi, India)
Anuradha Saikia (Economics and Public Policy, Indian Institute of Management, Shillong, India)
Hardeep Singh Mundi (Core Cluster, School of Business, UPES, Dehradun, India)

Managerial Finance

ISSN: 0307-4358

Article publication date: 13 June 2022

Issue publication date: 27 September 2022




Mergers and acquisitions (M&As) are of three types: domestic, inbound and outbound cross-border. Inbound M&As provide an inflow of foreign funds into the economy, whereas outbound M&As involve the outflow of domestic funds. This paper examines the impact of domestic and cross-border mergers and acquisitions in Brazil on each other.


The authors analyze M&A activity in Brazil and examine the impact domestic, inbound and outbound M&As have on each other. The study uses a vector auto-regressive model to test the relationships for each quarter of 2000–2018. The M&A activity is operationalized using the total number of deals and the cumulative value of the deals in a particular period.


The results depict stark contrast for M&A activity measured through incidences and monetary value. Overall, the number of deals can better explain each other than value. The authors find that, in terms of incidences, domestic M&A is Granger caused by both outbound and inbound M&As together. Further, inbound and domestic M&As together Granger cause outbound M&As in terms of aggregate monetary value. The impulse response function reveals that incidence shocks created in M&A activity are longer lasting than the value shocks.

Practical implications

The results have implications for businesses and policymakers. The study reveals the complexities of crowding effects important for businesses. The government needs to structure its future investment-promotion strategies depending on the objectives related to the number and value of M&A activity.


The study uses econometric tools and empirical methods to find the unexplored nature of the relationship between domestic, outbound and inbound cross-border M&As.



The authors are grateful to the employers for providing the authors with the time to carry out the research study smoothly. Authors would like to thank the editor and two anonymous referees for the comments on a preliminary version of this paper.


Kumar, D., Saikia, A. and Mundi, H.S. (2022), "Domestic, inbound and outbound M&A activity interdependence in Brazil", Managerial Finance, Vol. 48 No. 11, pp. 1591-1606.



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