The Impact of Country-level Characteristics on Cross-Border Merger and Acquisition Premiums
Date
2016-09-28
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
ORCID
Type
Thesis
Degree Level
Masters
Abstract
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.
Description
Keywords
Cross-border M&A, Country-level Characteristics, Premiums, Corporate Valuation, Corporate Governance
Citation
Degree
Master of Science (M.Sc.)
Department
Finance
Program
Finance