The wealth effects of acquiring foreign government-owned corporations: evidence from US-listed acquirers in cross-border mergers and acquisitions

Surendranath R. Jory and Thanh N. Ngo

Applied Financial Economics, 2011, vol. 21, issue 24, 1859-1872

Abstract: We study the short- and long-term effects of acquiring targets that are government owned, which we refer to as Government-Owned Corporations (GOCs). Our sample of acquirers consists of US-listed public corporations, while the targets are GOCs based outside the US. In comparison to acquisitions of non-GOCs, we find that the wealth effects of acquiring GOCs are more favourable. We also find that GOC targets located in countries with poorer governance characteristics positively impact the shareholders’ wealth of the acquirer. Our evidence suggests that acquirers of foreign GOCs exploit target country governance imperfections to their advantage.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1080/09603107.2011.595680 (text/html)
Access to full text is restricted to subscribers.

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:taf:apfiec:v:21:y:2011:i:24:p:1859-1872

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAFE20

DOI: 10.1080/09603107.2011.595680

Access Statistics for this article

Applied Financial Economics is currently edited by Anita Phillips

More articles in Applied Financial Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().