Does Belt and Road Initiative attract Cross‐Border M&As from other countries?

Abstract This article examines how the Belt and Road Initiative (BRI) affects Cross‐Border M&As (CMAs) inflows to countries along the Belt and Road routes (BRI countries) from non‐BRI countries. We conduct a difference‐in‐differences estimation with a control group constructed through propensity score matching. We find that the BRI significantly reduces CMAs from non‐BRI countries to BRI countries. The results are robust to various concerns and specifications. We uncover two important mechanisms driving the results: the increased CMAs within BRI countries and the potential debt risks. We also find heterogeneous effects across countries.