Cross‐Border Versus Domestic Acquisitions and the Impact on Shareholder Wealth

40 Pages Posted: 26 Oct 2012

See all articles by Jo Danbolt

Jo Danbolt

University of Edinburgh Business School

Gillian Maciver

affiliation not provided to SSRN

Date Written: September/October 2012

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.

Keywords: domestic and cross‐border acquisitions, shareholder wealth effects, cross‐border effect, acquisition experience, market access hypothesis, corporate governance

Suggested Citation

Danbolt, Jo and Maciver, Gillian, Cross‐Border Versus Domestic Acquisitions and the Impact on Shareholder Wealth (September/October 2012). Journal of Business Finance & Accounting, Vol. 39, Issue 7‐8, pp. 1028-1067, 2012, Available at SSRN: https://ssrn.com/abstract=2167176 or http://dx.doi.org/10.1111/j.1468-5957.2012.02294.x

Jo Danbolt (Contact Author)

University of Edinburgh Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
UNITED KINGDOM

Gillian Maciver

affiliation not provided to SSRN ( email )

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