International Deal Experience and Cross-Border Acquisitions

Caleb Stroup

No 15-03, Working Papers from Davidson College, Department of Economics

Abstract: I show that corporate directors' human capital facilitates international investments. Directors' experience with cross-border transactions positively influences firms' decisions to conduct their first cross-border acquisitions. Cross-border acquirers are more likely to buy firms headquartered in countries with which the directors have prior deal experience. This effect is strongest for target firms headquartered in culturally and institutionally dissimilar countries. Announced cross-border acquisitions are received more favorably by financial markets and are more likely to be completed successfully when the announcing firm has a director with cross-border acquisition experience. These effects are not driven by investment bank involvement in the deal process or by other forms of directors' human capital, and they are robust to endogeneity of director hires. Publication Status: Published in Economic Enquiry, 2017, 55(1):73-97.

Keywords: Cross-border Mergers and Acquisitions; Foreign Direct Investment (search for similar items in EconPapers)
JEL-codes: F21 F23 J24 L23 (search for similar items in EconPapers)
Date: 2015-11
New Economics Papers: this item is included in nep-cmp, nep-mac and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://onlinelibrary.wiley.com/doi/10.1111/ecin.12365/full (application/pdf)

Related works:
Journal Article: INTERNATIONAL DEAL EXPERIENCE AND CROSS-BORDER ACQUISITIONS (2017)
Working Paper: International Deal Experience and Cross-Border Acquisitions (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:dav:wpaper:15-03

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