The Determinants of Mergers and Acquisitions (M&A) Activity in US and EU

(Pages 2172-2178)

Victor Vasnetsov1,*, Catherine Kovenya-Vasnetsov1 and Ceyhun Elgin2
1Cambridge Center for International Research, UK.
2Columbia University, USA.


This paper investigates recent trends in Mergers and Acquisitions (M&A) during the 2001-19 period in the US and European Union (EU). The study specifically examines several determinants of M&A activity, encompassing not only conventional macroeconomic and financial factors but also sentiment considerations. As M&A is a larger and riskier investment option compared to other organic growth strategies for firms, its volume is cyclical and highly sensitive to a select set of external drivers. Given the inherent risks and swift pace of M&A, coupled with the far-reaching and long-term implications for the M&A-involved entities, this study introduces and explores the novel concept of "human sentiment" as a determinant of M&A activity. Through empirical analysis, the study establishes that both US and EU M&A volume are positively correlated to regional investor and consumer confidence, as well as stock market performance, while displaying negative correlations with stock market valuations and the cost of debt capital. These correlations prove to be highly statistically significant for both regions, albeit with some noteworthy regional nuances.


Mergers and acquisitions (M&A), Investment decisions, Human sentiment.

JEL Classification:

G34, G11, and G150.

How to Cite:

Victor Vasnetsov, Catherine Kovenya-Vasnetsov and Ceyhun Elgin. The Determinants of Mergers and Acquisitions (M&A) Activity in US and EU. [ref]: vol.21.2023. available at:

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