UNVEILING INFLUENCE OF HOME MACROECONOMIC FACTORS ON INDIAN OUTBOUND M&A

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By: SHEEBA KAPIL, PUNEET KAUR DHINGRA
JEL: P45, G34, F21, F23
Keywords: Outbound M&A; India, OFDI, Determinants, Home Country

Indian enterprises have succeeded in climbing the lad der of outward M&A
transactions and out performing everyone’s expectations post 1990s. This paper aims to
recalibrate the empirical literature of India’s outbound M&A by considering the impact of
home country macroeconomics variables from 1990 to 2019. Biv ariate regression and
quantile regression approach is used to examine the impact of selected macroeconomic
factors on outward M&A deal volume. The study found that the selected macroeconomic
variables gross domestic product, population, exports, imports, i nterest rates, international
reserves, human capital, trade openness, patents, exchange rate and per capita GDP
influences the deal volume especially at high percentiles. The home country companies
prefer to invest overseas specially when macroeconomic ind icators change at high level.
The empirical analysis of this paper provides policy makers a better understanding of
determinants of outbound M&A transactions by Indian firms, to formulate push policies to
encourage the same.