Get access

Economic Nationalism in Mergers and Acquisitions




    Search for more papers by this author
    • Serdar Dinc is with Rutgers Business School and Isil Erel is with the Ohio State University, Fisher College of Business. We would like to thank L. Iván Alfaro, Ji-Woong Chung, and John Sedunov for providing excellent research assistance. We are grateful to Christopher Wendt for sharing his voting data. We also would like to thank the referee; the Associate Editor; Kenneth Ahern; Campbell Harvey (the Editor); Randall Morck; John Parsons; Roberto Rigobon; Paola Sapienza; Antoinette Schoar; René Stulz; Michael Weisbach; Christopher Wendt; and seminar participants at 2012 American Finance Association Meetings, Brandeis University, Chicago Fed, Federal Reserve Board of Governors, Georgetown University, MIT, Ohio State University, Philadelphia Fed, Rutgers University, and University of Houston for comments. The usual disclaimer applies.


This paper studies government reactions to large corporate merger attempts in the European Union during 1997 to 2006 using hand-collected data. We document widespread economic nationalism in which the government prefers that target companies remain domestically owned rather than foreign-owned. This preference is stronger in times and countries with strong far-right parties and weak governments. Nationalist government reactions have both direct and indirect economic impacts on mergers. In particular, these reactions not only affect the outcome of the mergers that they target but also deter foreign companies from bidding for other companies in that country in the future.

Get access to the full text of this article