The Medium of Exchange in Mergers and Acquisitions: The Cases of Travel Agencies and Tour Operators

Alfredo Coelho and Victor Manuel Castillo-Girón
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Alfredo Coelho: Department Enterprises and Territories, Bordeaux Sciences Agro, 33170 Gradignan, France
Victor Manuel Castillo-Girón: CUValles, University of Guadalajara, 45 100 Zapopan, Mexico

Administrative Sciences, 2020, vol. 10, issue 4, 1-13

Abstract: The choice of the means of exchange is one of the critical decisions in mergers and acquisitions. Travel agencies and tour operating-industries compete in a volatile environment, and in addition to generating economies of scale, investments in the industry involve important sunk costs. This paper’s focus is on the determinants of the medium of exchange in mergers and acquisitions in the travel and tour-operating industries. Previous research on the ‘law and finance’ perspectives argues that some country of origin legal systems offer better investment protection to investors. Accordingly, civil law-based systems offer weaker protection to investors when compared to common-law-based systems. For this purpose, we use a logistics regression to model the determinants of cash in a sample of 750 mergers and acquisitions by combining the research streams above. Our results provide evidence of the relationship between investor protection and the use of cash.

Keywords: payment method; cash; mergers and acquisitions; tourism intermediaries (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2020
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