Can firms learn by observing? Evidence from cross-border M&As

Bill B. Francis, Iftekhar Hasan, Xian Sun and Maya Waisman

Journal of Corporate Finance, 2014, vol. 25, issue C, 202-215

Abstract: In the presence of high uncertainty and limited experience, can observing the actions of other acquiring predecessors help firms make better acquisition decisions? Using a sample of cross-border M&As conducted by US acquirers in developing countries, we document a positive and significant relationship between an acquirer's performance and its predecessors' acquisition activity. This relationship is especially pronounced in the prevalence of news events about the outcome of predecessors' acquisitions, when predecessors consist of US peers from the same industry and/or when targets are based in culturally distant countries. Our findings shed light on one channel through which information spillovers across industries and acquiring firms could be a key driver of value creation in developing market cross-border M&As.

Keywords: Learning; Observing; Cross-border M&As; Performance (search for similar items in EconPapers)
JEL-codes: D23 D83 G14 G32 G34 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0929119913001259
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Can firms learn by observing? Evidence from cross-border M&As (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:25:y:2014:i:c:p:202-215

DOI: 10.1016/j.jcorpfin.2013.11.018

Access Statistics for this article

Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter

More articles in Journal of Corporate Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().