Cross-Border M&A: Cultural Disparities and the Associated Wealth Effects

Fang (Helga) He, Feng-Shun (Leo) Bin and Dar-Hsin Chen
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Fang (Helga) He: Department of Management, Southern Illinois University¡XCarbondale, U.S.A.
Feng-Shun (Leo) Bin: Department of Business Administration, University of Illinois at Springfield, U.S.A.
Dar-Hsin Chen: Department of Business Administration, National Taipei University, Taiwan

International Journal of Business and Economics, 2008, vol. 7, issue 2, 89-100

Abstract: This study employs event-study methodologies to examine the stock price behaviors of US target firms surrounding the 1996¡V2005 cross-border M&A events related to corporate offers. We further apply factor analysis with country fixed-effect specifications to identify the determinants that may significantly contribute to the abnormal stock performance associated with cross-border M&A. While the sample target firms are all headquartered in the US, the foreign corporate bidders are grouped into various subsamples based on their countries of origin and presumably distinct cultures. Our evidence suggests that cultural disparities could play an important role in determining stock price performance around M&A public offer announcements.

Keywords: M&A; cultural disparities; event studies; wealth effects (search for similar items in EconPapers)
JEL-codes: F21 G15 G34 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ijb:journl:v:7:y:2008:i:2:p:89-100

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