The Impact of Country Diversification on Wealth Effects in Cross‐Border Mergers

Financial Review - Tập 35 Số 2 - Trang 37-58 - 2000
Halil Kiymaz1, Tarun K. Mukherjee2
1University of Houston, Clear Lake
2Univ of New Orleans

Tóm tắt

AbstractWe posit that country diversification via cross‐border mergers creates wealth by providing benefits for firms that are not available to their shareholders. We hypothesize that these benefits are inversely related to the extent of co‐movement in the economies of the bidder's and target's countries. We examine the wealth effects of U.S. targets and bidders involved in cross‐border mergers with firms in other countries during 1982–1991. We show that wealth effects vary, depending on country affiliations of two merging firms, and are inversely related to the degree of economic co‐movement between the two countries.

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Financial Review

Tập 35 Số 2

37-58

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