The Role of Similar Accounting Standards in Cross-Border Mergers and Acquisitions

• 成果类型: Article
• 署名作者: Francis, Jere R.; Huang, Shawn X.; Khurana, Inder K.
• 署名单位: University of Missouri System; University of Missouri Columbia; Arizona State University; Arizona State University-Tempe
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12176
• 发表日期: 2016
• 页码: 1298-1330
• 关键词: MANDATORY IFRS ADOPTION; earnings management; Investor protection; HOME BIAS; cash flow; INFORMATION; determinants; cost; incentives; relevance

摘要

This study investigates whether differences in accounting standards across countries create information costs that inhibit firms from investing in foreign markets. Using the frequency and dollar magnitude of cross-border mergers and acquisitions (M&As) from 32 countries over the period 1998-2004, we find that the aggregate volume of M&A activity across country pairs is larger for pairs of countries with similar Generally Accepted Accounting Principles (GAAP), and that this increased volume of M&A activity is driven by target countries that also have strong enforcement. We also find that the 2005 mandatory adoption of International Financial Reporting Standard (IFRS) attracted more cross-border M&As among IFRS-adopting countries, and that this increase in M&A activity within the IFRS countries is more pronounced for country pairs with low similarity in GAAP in the pre-IFRS adoption period. Overall, our results highlight the role of accounting standards and enforcement in shaping cross-border M&A activity.