![Worldwide Mergers and Acquisitions, 1990-2022 | The Geography of Transport Systems](https://i0.wp.com/transportgeography.org/wp-content/uploads/2017/10/global_mergers_acquisitions.png?w=900&ssl=1)
Source: UNCTAD. (in millions of current USD)
Mergers and acquisitions (M&A) are a strategy used by firms to expand globally. Since M&A are also financial transactions requiring large amounts of capital, they are linked with boom and bust phases that commonly characterize the financial sector. After a phase of quick expansion lasting about 5 years, there is a retrenchment phase as the profitability of the accumulated investments is assessed. Fast growth in capital investment is commonly associated with misallocations in projects and assets with limited or no profitability.