What determines mergers and acquisitions in BRICS countries: Liquidity, exchange rate or innovation?

This study examines the impact of liquidity, international competitiveness, and innovation on 44,756 domestic and 20,917 cross-border mergers and acquisition (M&A) transactions over 25 years in BRICS nations. The results from negative binomial fixed effects panel regression are in alignment with economic prosperity theory, namely, there is synchronised alignment between macroeconomic determinants and business cycles, which, in turn, leads to M&A activities. Domestic M&A is driven primarily by high liquidity followed by innovation. Inbound M&A volume is impacted by exchange rate parity, followed by liquidity. The order of factors influencing the outbound M&A volume is liquidity, exchange rate parity, and, lastly, innovation.