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The considerable expansion in mergers and acquisitions across the globe has focused attention on whether this phenomena enhances overall economic outcomes. This study attempts to investigate the empirical relationship between mergers and acquisitions and investment. The essay uses data on over 60 developed and developing countries over the period 1987 to 2001 and finds that mergers and acquisitions do seem to Granger cause’ investment. This result is robust to changes in the model and estimation procedure.