The effects of cross-border and cross-industry mergers and acquisitions on home-region and global multinational enterprises
The effects of cross-border and cross-industry mergers and acquisitions on home-region and global multinational enterprises
We examine the effects of international and product diversification through mergers and acquisitions (M&As) on the firm's risk–return profile. We identify the rewards from different types of M&As and investigate whether becoming a global firm is a value-enhancing strategy. Drawing on the theoretical work of Vachani (Journal of International Business Studies, 22 (1991), pp. 307?222) and on Rugman and Verbeke's (Journal of International Business Studies, 35 (2004), pp. 3?18) metrics, we classify firms according to their degree of international and product diversification. To account for the endogeneity of M&As, we develop a panel vector autoregression. We find that global and host-region multinational enterprises benefit from cross-border M&As that reinforce their geographical footprint. Cross-industry M&As enhance the risk–return profile of home-region firms. This effect depends on the degree of product diversification. Hence there is no value-enhancing M&A strategy for home-region and bi-regional firms to become ‘truly global’.
n/a
Kling, Gerhard
feea1f9e-c49a-4d9c-b688-ec839cef9624
Ghobadian, Abby
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Hitt, Michael
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Weitzel, Utz
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O'Regan, Nicholas
ed24865a-ed49-4b58-8e64-eb5ce9365975
Kling, Gerhard
feea1f9e-c49a-4d9c-b688-ec839cef9624
Ghobadian, Abby
909abc43-9c78-4f86-8ec4-2f47f3159d3d
Hitt, Michael
ae3bf3d5-54fd-45d0-8a72-2a1246e27403
Weitzel, Utz
b7ff4997-1130-4331-87ec-a5f68c05845c
O'Regan, Nicholas
ed24865a-ed49-4b58-8e64-eb5ce9365975
Kling, Gerhard, Ghobadian, Abby, Hitt, Michael, Weitzel, Utz and O'Regan, Nicholas
(2013)
The effects of cross-border and cross-industry mergers and acquisitions on home-region and global multinational enterprises.
British Journal of Management, n/a, .
(doi:10.1111/1467-8551.12023).
Abstract
We examine the effects of international and product diversification through mergers and acquisitions (M&As) on the firm's risk–return profile. We identify the rewards from different types of M&As and investigate whether becoming a global firm is a value-enhancing strategy. Drawing on the theoretical work of Vachani (Journal of International Business Studies, 22 (1991), pp. 307?222) and on Rugman and Verbeke's (Journal of International Business Studies, 35 (2004), pp. 3?18) metrics, we classify firms according to their degree of international and product diversification. To account for the endogeneity of M&As, we develop a panel vector autoregression. We find that global and host-region multinational enterprises benefit from cross-border M&As that reinforce their geographical footprint. Cross-industry M&As enhance the risk–return profile of home-region firms. This effect depends on the degree of product diversification. Hence there is no value-enhancing M&A strategy for home-region and bi-regional firms to become ‘truly global’.
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e-pub ahead of print date: 17 June 2013
Organisations:
Centre for Digital, Interactive & Data Driven Marketing
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Local EPrints ID: 351263
URI: http://eprints.soton.ac.uk/id/eprint/351263
ISSN: 1045-3172
PURE UUID: 30eb6e6f-2f48-40ca-8ee7-a92ffcff1212
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Date deposited: 18 Apr 2013 13:22
Last modified: 14 Mar 2024 13:37
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Author:
Gerhard Kling
Author:
Abby Ghobadian
Author:
Michael Hitt
Author:
Utz Weitzel
Author:
Nicholas O'Regan
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