Katz Graduate School of Business
University of Pittsburgh
219 Mervis Hall
Pittsburgh, PA 15260
NBER Working Papers and Publications
|January 2011||Globalization, Governance, and the Returns to Cross-Border Acquisitions|
with Sara B. Moeller, Frederik P. Schlingemann, René M. Stulz: w16676
Using a sample of control cross-border acquisitions from 61 countries from 1990 to 2007, we find that acquirers from countries with better governance gain more from such acquisitions and their gains are higher when targets are from countries with worse governance. Other acquirer country characteristics are not consistently related to acquisition gains. For instance, the anti-self-dealing index of the acquirer has opposite associations with acquirer returns depending on whether the acquisition of a public firm is paid for with cash or equity. Strikingly, global effects in acquisition returns are at least as important as acquirer country effects. First, the acquirer's industry and the year of the acquisition explain more of the stock-price reaction than the country of the acquirer. Second, f...