The wealth effects of acquiring foreign government-owned corporations: evidence from US-listed acquirers in cross-border mergers and acquisitions
The wealth effects of acquiring foreign government-owned corporations: evidence from US-listed acquirers in cross-border mergers and acquisitions
We study the short- and long-term effects of acquiring targets that are government owned, which we refer to as Government-Owned Corporations (GOCs). Our sample of acquirers consists of US-listed public corporations, while the targets are GOCs based outside the US. In comparison to acquisitions of non-GOCs, we find that the wealth effects of acquiring GOCs are more favourable. We also find that GOC targets located in countries with poorer governance characteristics positively impact the shareholders’ wealth of the acquirer. Our evidence suggests that acquirers of foreign GOCs exploit target country governance imperfections to their advantage
1859-1872
Jory, Surendranath
2624eb24-850a-48f6-b3c6-c96749b87322
Ngo, Thanh N.
54ed0c1a-89c8-4cc0-a5fe-8a4b91490265
Jory, Surendranath
2624eb24-850a-48f6-b3c6-c96749b87322
Ngo, Thanh N.
54ed0c1a-89c8-4cc0-a5fe-8a4b91490265
Jory, Surendranath and Ngo, Thanh N.
(2011)
The wealth effects of acquiring foreign government-owned corporations: evidence from US-listed acquirers in cross-border mergers and acquisitions.
Applied Financial Economics, 21 (24), .
(doi:10.1080/09603107.2011.595680).
Abstract
We study the short- and long-term effects of acquiring targets that are government owned, which we refer to as Government-Owned Corporations (GOCs). Our sample of acquirers consists of US-listed public corporations, while the targets are GOCs based outside the US. In comparison to acquisitions of non-GOCs, we find that the wealth effects of acquiring GOCs are more favourable. We also find that GOC targets located in countries with poorer governance characteristics positively impact the shareholders’ wealth of the acquirer. Our evidence suggests that acquirers of foreign GOCs exploit target country governance imperfections to their advantage
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e-pub ahead of print date: 19 September 2011
Organisations:
Southampton Business School
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Local EPrints ID: 394331
URI: http://eprints.soton.ac.uk/id/eprint/394331
ISSN: 0960-3107
PURE UUID: 051c96f6-09cd-4716-8a79-e4e25ae8ce7a
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Date deposited: 13 May 2016 07:32
Last modified: 15 Mar 2024 03:45
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Author:
Thanh N. Ngo
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