Cross-Border versus Domestic Acquisitions and the Impact on Shareholder Wealth

Jo Danbolt, G Maciver

Research output: Contribution to journalArticlepeer-review

Abstract

We analyse the impact on targets and bidders from cross-border acquisitions into and out of the UK, in comparison to companies involved in similar domestic acquisitions. We find both targets and bidders to gain more in cross-border than in comparable domestic acquisitions, with target and bidder cross-border effects of 10.1 and 1.5 percentage points, respectively. The cross-border effect is significantly higher for targets acquired by companies from countries with superior governance systems to their own. There is weak evidence to suggest bidders gain from entering new markets but for targets to gain more where the bidder already operates in the target country.
Original languageEnglish
Pages (from-to)1028-1067
Number of pages40
JournalJournal of Business Finance and Accounting
Volume39
Issue number7-8
Publication statusPublished - Sep 2012

Keywords

  • Domestic and cross-border acquisitions
  • Shareholder wealth effects
  • Cross-border effect
  • Acquisition experience
  • Market access hypothesis
  • Corporate governance.

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