Religion, risk aversion, and cross border mergers and acquisitions

Min Maung, Zhenyang Tang, Craig Wilson and Xiaowei Xu

Journal of International Financial Markets, Institutions and Money, 2021, vol. 70, issue C

Abstract: We study the relation between religiosity (a measure of the strength of a country’s religious belief) and cross-border mergers and acquisitions. We find that acquirers from more religious countries conduct fewer and smaller cross-border merger transactions and, when they do, they pay less, and a smaller proportion of their payment is in the form of cash (as opposed to stock). Having a greater proportion paid by stock effectively binds targets to the acquirer’s post-merger risks. Our results suggest that a country’s religiosity may closely proxy the aversion to risk of its companies’ directors and executives. We also show (with a few minor exceptions) that a country’s primary religion such as Catholicism, Protestantism, and Buddhism, tends not to have a bearing on the cross-border merger transactions, method of payment, or premium, after accounting for the degree of religiosity.

Keywords: Religiosity; Cross border; Mergers & acquisitions; Risk aversion (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042443120301463
Full text for ScienceDirect subscribers only

Related works:
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:intfin:v:70:y:2021:i:c:s1042443120301463

DOI: 10.1016/j.intfin.2020.101262

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().