WiP Seminar: Alessandro Morico

Title: "Revisiting the "Assessing Market Attractiveness for Mergers and Acquisitions Index Score": The effect of Geopolitics and ESG (with Nagueesh Appadu)"

  • Date: 07 September 2023 from 13:00 to 14:00

  • Event location: Seminar Room - Piazza Scaravilli, 2 + Microsoft Teams Meeting

Abstract

This paper integrates geopolitical uncertainty and ESG factors into the scoring methodology of the M&A attractiveness index score (MAAIS). This methodology is designed to measure a country’s capability to attract cross-border inflow and domestic mergers and acquisitions (M&A). In detail, each country’s regulatory and political, economic and financial, technological and socio-economic environments, as well as the quality of its infrastructure and assets, are measured in order to provide an overall country- and year-specific index score. The inclusion of geopolitical risk and uncertainty and ESG considerations into this framework therefore becomes a natural but important step towards a comprehensive assessment of the attractiveness of a country, especially in light of recent developments in financial markets. We find that - in addition to the first five factors (regulatory and political, economic and financial, technological, socio economic, and infrastructure and assets) - ESG is also a key component to M&A activities. Further, our results show that in periods of uncertainty, there is a reduction in M&A activity while geopolitical risk is positively related to both volume and value of cross-border M&A activity.