Portable country governance and cross border acquisitions

• 成果类型: Article
• 署名作者: Ellis, Jesse A.; Moeller, Sara B.; Schlingemann, Frederik P.; Stulz, Rene M.
• 署名单位: North Carolina State University; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh; Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam; University System of Ohio; Ohio State University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-016-0029-9
• 发表日期: 2017
• 页码: 148-173
• 关键词: portability theory; Agency theory; theory on law and finance; event study methodology; Cross-border acquisitions; country governance; Bidder returns

摘要

The agency theory and law and finance literatures show good country governance encourages financial development, mitigates agency problems, and increases firm value. Drawing on these literatures, we develop a theory that benefits from good country governance are portable by firms across countries through cross-border acquisitions. Using acquisitions from 56 countries from 1990 to 2007, we find that acquirers can transport the benefits from good country governance, so that they gain more from acquiring targets with worse country governance than their own. As predicted, the acquirer's stock-price reaction to acquisitions increases with the country governance distance between the acquirer and the target.