Drivers of M&A transaction activity- A macroeconomic perspective

Abstract

The paper examines potential drivers for the market of mergers and acquisitions transactions in Sweden between the years 2000 and 2023. An OLS regression analysis is performed to investigate how the number of transactions correlates with Sweden's economic growth (GDP) and cost of capital (STIBOR). By further including the control variables unemployment rate, SEK/EURO exchange rate, and political factors, the research is intended to yield a deeper understanding of the M&A activity in Sweden. The findings show statistically significant positive correlation between GDP and the number of M&A transactions, indicating that Swedish economic growth drives the M&A activity. On the other hand, the STIBOR interest rate appears to have a negative effect on the M&A market after observing a statistically significant negative correlation. However after performing several robustness tests, the relationship between STIBOR and M&A transactions seems to be more complex with diminishing statistical significance. Thus, the hypothesis of a positive correlation between GDPand M&Aactivity is confirmed, while the impact of STIBOR is uncertain.