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Cross-border acquisitions and financial leverage of UK acquirers

Cross-border acquisitions and financial leverage of UK acquirers
Cross-border acquisitions and financial leverage of UK acquirers
Based on a sample of 782 acquisitions by UK firms during 1982-2009, this paper examines the impact of cross-border acquisitions on financial leverage. The paper shows that cross-border acquisitions have a negative impact on the financial leverage of acquiring firms. However, the negative impact of cross-border acquisitions disappears when acquirers choose targets from developed countries, and also when the acquisitions are undertaken by multinational firms. Collectively, the findings imply that exposure to foreign markets reduces the borrowing ability of acquiring firms especially when they choose targets from developing countries, and when they have no experience in foreign markets.
Financial leverage, Cross-border acquisitions, internationalisation, M&A, UK
0155-9982
97-108
Agyei-Boapeah, Henry
37005f29-d453-458e-b6b5-cd92e55587a4
Agyei-Boapeah, Henry
37005f29-d453-458e-b6b5-cd92e55587a4

Agyei-Boapeah, Henry (2015) Cross-border acquisitions and financial leverage of UK acquirers. Accounting Forum, 39 (2), 97-108. (doi:10.1016/j.accfor.2015.03.002).

Record type: Article

Abstract

Based on a sample of 782 acquisitions by UK firms during 1982-2009, this paper examines the impact of cross-border acquisitions on financial leverage. The paper shows that cross-border acquisitions have a negative impact on the financial leverage of acquiring firms. However, the negative impact of cross-border acquisitions disappears when acquirers choose targets from developed countries, and also when the acquisitions are undertaken by multinational firms. Collectively, the findings imply that exposure to foreign markets reduces the borrowing ability of acquiring firms especially when they choose targets from developing countries, and when they have no experience in foreign markets.

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More information

Accepted/In Press date: 24 March 2015
Published date: 1 June 2015
Keywords: Financial leverage, Cross-border acquisitions, internationalisation, M&A, UK

Identifiers

Local EPrints ID: 434315
URI: http://eprints.soton.ac.uk/id/eprint/434315
ISSN: 0155-9982
PURE UUID: e679d529-738a-445a-a455-d78c6e1381dd
ORCID for Henry Agyei-Boapeah: ORCID iD orcid.org/0000-0003-4798-6324

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Date deposited: 19 Sep 2019 16:30
Last modified: 17 Dec 2019 01:20

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