The Shareholder's response to a firm's first international acquisition

Krishnan Dandapani, Ann Marie Hibbert and Edward R. Lawrence

Journal of Banking & Finance, 2020, vol. 118, issue C

Abstract: We identify the first and subsequent acquisitions made by U.S. firms that conduct multiple cross-border acquisitions and provide robust evidence that shareholders realize a statistically significant three-day cumulative abnormal return (CAR) of 1% around the announcement of their first international acquisition. The CAR for the first acquisition is significantly higher than the CAR around the announcement of subsequent cross-border acquisitions and is unique to cross-border acquisitions. Our findings indicate that shareholders of U.S. firms attach a premium to the firm's initial effort to globalize via international acquisitions.

Keywords: Cross-border mergers and acquisitions; First international acquisition; Event study; Globalization premium (search for similar items in EconPapers)
JEL-codes: G14 G34 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:118:y:2020:i:c:s0378426620301187

DOI: 10.1016/j.jbankfin.2020.105852

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