(African Economic Research consortium, 2020-11-10) Wilson, Magdalene Kasyoka; Alain Pholo Bala, Alain Pholo
In this paper, we examined how regional integration affected cross-border M&A in
Africa for the period 2000 to 2014 using a structural gravity model. We found that
customs unions in Africa, specifically Southern Africa Customs Union (SACU) and the
East African Community (EAC) are significant drivers of M&A by firms from within the
unions but not those from outside, perhaps due to their relatively small size. This
finding suggests that the depth of regional integration determines intra-regional M&A
flows in Africa. Findings from this paper suggest that African governments need to
strengthen the existing regional integration arrangements, as the case of SACU and
EAC indicates, to benefit from intra-African cross-border M&A flows.