The Impact of Country-level Characteristics on Cross-Border Merger and Acquisition Premiums
Shedden, Myles D 1987-
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It is observed that merger premiums vary across countries. In this paper we study the impact of country-level characteristics on cross-border merger and acquisition premiums. By using principal component analysis to combine several existing country-level indices, we provide empirical evidence that stronger measures of legal and regulatory standards, investor protection, and corporate transparency lead to higher merger premiums in cross-border transactions. The results indicate that managers of the acquiring firm are willing to pay a higher premium to acquire a foreign target when they believe the risks of achieving merger synergies are lower, and that the market for corporate control is not an effective substitute for a formal legal and regulatory system that protects shareholders.
DegreeMaster of Science (M.Sc.)
CommitteeMaung, Min; Wilson, Craig; Mamun, Abdullah; Zhang, Zhou
Copyright DateOctober 2016