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Cross-Border Acquisitions and Employee-Engagement

Hao Liang, Luc Renneboog () and Cara Vansteenkiste
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Hao Liang: Tilburg University, Center For Economic Research
Cara Vansteenkiste: Tilburg University, Center For Economic Research

No 2017-038, Discussion Paper from Tilburg University, Center for Economic Research

Abstract: We provide novel evidence that a firm’s engagement in employee-related issues explains part of the value difference between its domestic and cross-border takeovers. An acquirer’s investment in employee relations is positively related to the firm’s performance when acquiring domestically, but labor-related frictions reverse this effect when acquiring a foreign target. The results cannot be explained by country-level labor regulation but are consistent with the notion that labor-related frictions exist that prohibit firms from efficiently transforming monetary incentives in higher shareholder value when acquiring a foreign target firm.

Keywords: employee-engagement; labor protection; Monetary incentives; Cross-Border Mergers and Acquisitions (search for similar items in EconPapers)
JEL-codes: G34 M14 J24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-lma
Date: 2017
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