International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions

Rui Albuquerque, Luis Brandão-Marques, Miguel Ferreira and Pedro Matos
Authors registered in the RePEc Author Service: Luis Brandao Marques

No 2013/234, IMF Working Papers from International Monetary Fund

Abstract: We develop and test the hypothesis that foreign direct investment promotes corporate governance spillovers in the host country. Using firm-level data on cross-border mergers and acquisitions (M&A) and corporate governance in 22 countries, we find that cross-border M&As are associated with subsequent improvements in the governance, valuation, and productivity of the target firms’ local rivals. This positive spillover effect is stronger when the acquirer is from a country with stronger shareholder protection and if the target’s industry is more competitive. We conclude that the international market for corporate control promotes the adoption of better corporate governance practices around the world.

Keywords: WP; spillover effect; target firm; cross-border m&a; acquirer firm; panel regression; Foreign direct investment; Corporate governance; Cross border mergers; acquisitions; Spillovers; governance attribute; investor protection; industry classification; Competition; Productivity; Market capitalization; Global (search for similar items in EconPapers)
Pages: 41
Date: 2013-11-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions (2019)
Working Paper: International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions (2015)
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