The evolution and trajectories of the geography of mergers and acquisitions: A city network analysis for Canada, 1994–2016

ABSTRACT

This article studies the spatial evolution of mergers and acquisitions (M&A) in Canada to investigate the path dependence process of corporate control geography. The analysis is based on network analysis and quadratic assignment procedure (QAP) regression models for transactions of more than C$5 million between 1994 and 2016. The results indicate that the geography of economic decision-making is highly path-dependent, and that Toronto, Montreal, Vancouver, and Calgary are the main destinations of M&As. However, Winnipeg and Guelph have emerged as new power centers.

Acknowledgments

The authors would like to thank Thierry Badard for his helpful support in extracting the Informat database. We would also like to thank the editor and the four anonymous reviewers. Their comments and suggestions improved the article.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. It means that two economic activities share some knowledge, or they are part of the same sector or subsector (Boschma et al., 2016). The reciprocity of economic activities is a key point since a certain knowledge proximity allows managers to make the decision to undertake a takeover and further to develop synergy and innovation capacities between companies.

2. Boschma et al. (2016) use the rule of law indicator as a proxy for quality of institutions. This measures the performance of each province based on criteria like information on crimes against property, crimes reported, trial times, magistrate productivity, submerged economy and tax evasion (source: Nifo and Vecchione (2013)).

3. Hierarchical transnational organization is a more fragmented geographic arrangement than a geographically concentrated organization. Therefore, there are central countries in the network that exercise a control function under the other countries (Turkina et al., 2016).

Additional information

Funding

This study was financed in part by the Social Sciences and Humanities Research Council (SSHRC).

Notes on contributors

Diego Andres Cardenas Morales

Diego Andres Cardenas Morales is a PhD candidate at the Graduate School of Land Management and Regional Planning (ÉSAD) at Laval University in Québec, Canada. He completed his bachelor’s degree in economics at the University of Tolima in Colombia and holds a master’s degree in ATDR from Laval University. His work and main research interests are in the fields of merger and acquisition activity as well as firm migration. He is also interested in spatiotemporal and network analysis.

Jean Dubé

Jean Dubé is a full professor at the Graduate School of Land Planning and Regional Development (ÉSAD). He is also a visiting professor at the National Institute for Scientific Research (INRS) at the Urbanization, Culture and Society research center (UCS) in Montreal, Quebec. He was previously a professor at the University of Quebec in Rimouski between 2010 and 2014. He is a leading scholar in spatio-temporal modeling for spatial data pooled over time. His areas of research are in economic development, public policy, real estate prices, urban externalities, territorial dynamics, and modeling.