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<p>The emergence of financial openness has been another force that has fundamentally changed the restructuring dynamics around developing economies, with cross-border capital flows, ownership transfers and merger &amp; acquisition (M&amp;A) activity increasingly speeding up the process. Although financial liberalisation has become more important, little evidence exists regarding the impact of financial openness on M&amp;A-driven corporate restructuring in developing countries under different institutional conditions. In order to address this gap, the study examines the direct, moderating, and non-linear effects of financial openness on corporate restructuring in 25 developing economies over the period 2000–2023. Employing panel-data methods using Fixed Effects (FE), Random Effects (RE) and dynamic System Generalised Method of Moments (System GMM) estimations, the paper examines how financial openness, institutional quality and macroeconomic stability determine M&amp;A-based restructuring behaviour. The results show that corporate reorganisation is facilitated by financial openness, through greater access to international sources of financing and more cross-border acquisitions. The results also show that institutional quality positively moderates this relationship, suggesting that better governance, investor protection and regulatory quality enhance the potential gains from restructuring openness. Yet, the analysis also detects an important non-linear effect, which indicates that too much openness leads to a higher vulnerability to speculative capital flows and macroeconomic volatility, which decreases long-term sustainability issues in restructuring. This study integrates the macro-financial liberalisation literature with the micro-corporate transformation literature in a single empirical framework, contributing to our understanding of global consolidation and financial globalisation processes. The results encourage the “smart openness” strategy that combines progressive liberalisation with institution building, macroprudential regulation and governance reforms. These findings have important implications for policymakers, financial regulators, and corporate strategists who are working to enhance sustainable restructuring and long-term economic resilience in developing economies.</p>

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The role of financial openness in shaping corporate reorganisation: evidence from M&A waves in developing countries

  • 期刊论文

  • 发表日期：

    2026年7月17日

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  • Srilakshmi Thammisetty

摘要

The emergence of financial openness has been another force that has fundamentally changed the restructuring dynamics around developing economies, with cross-border capital flows, ownership transfers and merger & acquisition (M&A) activity increasingly speeding up the process. Although financial liberalisation has become more important, little evidence exists regarding the impact of financial openness on M&A-driven corporate restructuring in developing countries under different institutional conditions. In order to address this gap, the study examines the direct, moderating, and non-linear effects of financial openness on corporate restructuring in 25 developing economies over the period 2000–2023. Employing panel-data methods using Fixed Effects (FE), Random Effects (RE) and dynamic System Generalised Method of Moments (System GMM) estimations, the paper examines how financial openness, institutional quality and macroeconomic stability determine M&A-based restructuring behaviour. The results show that corporate reorganisation is facilitated by financial openness, through greater access to international sources of financing and more cross-border acquisitions. The results also show that institutional quality positively moderates this relationship, suggesting that better governance, investor protection and regulatory quality enhance the potential gains from restructuring openness. Yet, the analysis also detects an important non-linear effect, which indicates that too much openness leads to a higher vulnerability to speculative capital flows and macroeconomic volatility, which decreases long-term sustainability issues in restructuring. This study integrates the macro-financial liberalisation literature with the micro-corporate transformation literature in a single empirical framework, contributing to our understanding of global consolidation and financial globalisation processes. The results encourage the “smart openness” strategy that combines progressive liberalisation with institution building, macroprudential regulation and governance reforms. These findings have important implications for policymakers, financial regulators, and corporate strategists who are working to enhance sustainable restructuring and long-term economic resilience in developing economies.