Filing institutional voids in emerging economies: The impact of capital market development and business groups on M&A deal abandonment

• 成果类型: Article
• 署名作者: Kim, Hyejun; Song, Jaeyong
• 署名单位: Massachusetts Institute of Technology (MIT); Seoul National University (SNU)
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-016-0025-0
• 发表日期: 2017
• 页码: 308-323
• 关键词: INSTITUTIONAL ENVIRONMENT; emerging markets/countries/economies; business groups; Institutional voids

摘要

Business groups may fill institutional voids in emerging economies, but empirical research is lacking as to when and how institutional voids affect economic behavior of individual firms. We examine the effect of institutional voids in capital markets on individual transactions in emerging economies, focusing on M&A deals that were abandoned after being publicly announced. M&A deals may fall through when unexpected information is brought to light or financing difficulties arise. At the country level, capital market development can lower the probability of M&A deal abandonment by facilitating the flow of information and capital. At the firm level, when acquirers are affiliated with business groups, development of internal capital markets can also lower this probability, facilitating completion of the transaction and the flow of information. This effect of business groups, however, decreases as the external capital market, the institution replaced by their internal markets, develops and its benefits become widely available to non-business groups. The results of our empirical analyses on M&A transactions in nine emerging economies over 21 years support our arguments.