Working Paper: NBER ID: w30597
Authors: Isil Erel; Yeejin Jang; Michael S. Weisbach
Abstract: One of the most consequential events in any firm’s lifetime is a major acquisition. Because of their importance, mergers and acquisitions (M&As) have been an enormous area of research. However, the vast majority of this research and survey papers summarizing this research have focused on domestic deals. Cross-border ones, however, constitute about 30% of the total number and 37% of the total volume of M&As around the world since the early 1990s. We survey the literature on cross-border M&As, focusing on international factors that can lead firms to acquire a firm in another country. Such factors include differences in economic development, laws, institutions, culture, labor rights, protection of intellectual property, taxes, and corporate governance.
Keywords: crossborder mergers; acquisitions; international factors; corporate governance; cultural differences
JEL Codes: F00; G15; G34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| differences in a country's laws and institutions (O17) | crossborder acquisitions (F23) |
| stronger legal protections for shareholders (G38) | access to capital markets (O16) |
| access to capital markets (O16) | crossborder acquisitions (F23) |
| regulatory arbitrage (G18) | crossborder deals (F55) |
| cultural differences (Z19) | likelihood of successful crossborder acquisitions (F23) |
| political tensions (F52) | crossborder mergers (F23) |
| tax motivations (H20) | crossborder acquisitions (F23) |
| acquisitions (G34) | organic growth (O49) |