The impact of exchange rate movements on mergers and acquisitions FDI

Anand Shetty, John Manley and Nyonyo Kyaw

Journal of Multinational Financial Management, 2019, vol. 52-53

Abstract: This paper investigates the effect of exchange rate movements on return outcomes associated with mergers and acquisitions FDI. We examine this relationship for cross-border mergers and acquisitions undertaken in 2001-2010 by 591 U.S. firms using both real and nominal bilateral exchange rates. The analysis of abnormal returns reveals no consistent relationship between the real exchange rate movements and bidder returns. However, we do find a statistically significant positive impact of exchange rate volatility on bidder returns. In addition, we find support for a significant relationship between bidder’s overseas experience with bidder returns and deal size with bidder returns.

Keywords: FDI; Cross-border mergers and acquisitions; Exchange rate movements; Bidder gains (search for similar items in EconPapers)
JEL-codes: F23 F31 G34 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:52-53:y:2019:i::s1042444x19300349

DOI: 10.1016/j.mulfin.2019.100594

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