Undergraduate Honors Theses

Thesis Defended

Spring 2018

Document Type


Type of Thesis

Departmental Honors



First Advisor

Keith Maskus


This study examines the effects of tariff barriers on cross-border Mergers and Acquisition (M&A) investment and shows how tariffs impact M&A deal value. Since the 1990s, we saw a decline in tariff rates for most nations coinciding with a sharp rise in cross-border M&A. The rise in cross-border M&A has significant implications on various issues from antitrust to foreign direct investment. To analyze the effect of tariff barriers, I use a panel dataset primarily obtained from Bloomberg and UNCTAD. I employ a gravity model to allow for distance and macroeconomic effects along with a poisson distribution based on the counting nature of the dataset. Based on the data given, there is a statistically significant positive correlation between M&A activity and tariff rates for both acquirer and target countries, indicating that a firms motive for cross-border M&A is mainly a market-entry strategy