Cross-border Corporate Investments in Argentina: An Empirical Analysis of Macro-financial Drivers and Forecasting Approach

This paper examines the dynamics of cross-border corporate investments towards Argentina, an emerging economy characterised by pronounced macroeconomic and financial volatility. While most of the literature focuses on mergers and acquisitions, emphasising deal-specific characteristics and the attributes of transacting parties, this paper shifts the attention towards the broader category of corporate investments, namely non-greenfield foreign direct investment, and the role of the macro-financial environment as a key determinant of investment activity. Using monthly deal count data over the period 1999-2025, this study investigates the relationship between cross-border corporate investment activity and a set of domestic and global macro-financial variables, leveraging a high-frequency perspective that remains largely underexplored. By focusing on deal counts rather than transaction values, the analysis isolates the frequency of investment decisions from deal size effects. The study pursues a twofold objective: to identify the macroeconomic and financial factors driving fluctuations in cross-border corporate investment activity, and to assess their joint predictive power in a dynamic framework. The empirical strategy proceeds in two stages, by employing a static Generalised Linear Model to identify the macro-financial determinants of deal count variability, and an INGARCH specification to account for the serial dependence inherent in count data, further extended to out-of-sample forecasting. The results reveal a shift in the relative importance of explanatory variables across the two frameworks: domestic macro-financial conditions emerge as the dominant drivers in the static model, whereas global factors gain prominence in the dynamic specification. Once investment momentum is explicitly modelled, the marginal contribution of domestic variables diminishes substantially, suggesting that herd behaviour plays a considerable role in shaping the timing of cross-border corporate investments into Argentina.