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Bridging the Cultural Divide: The Role of Foreign Directors in Cross-Border Mergers

Yaqoub Alabdullah and Stephen P. Ferris

A chapter in Corporate Governance in the US and Global Settings, 2014, vol. 17, pp 35-79 from Emerald Publishing Ltd

Abstract: Abstract This study uses cross-border mergers as a test of the ability of foreign directors to provide effective strategic advising. We find that firms with foreign directors on their boards are more likely to engage in cross-border mergers, pursue a higher number of cross-border mergers, and invest more in those mergers. We further determine that firms with foreign directors are more likely to undertake nondiversifying mergers, enjoy friendly mergers, and acquire privately held targets. Moreover, we find that firms with foreign directors have higher announcement period returns and pay less for their cross-border targets.

Keywords: Governance; boards; mergers; acquisition; foreign (search for similar items in EconPapers)
Date: 2014
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