INTERNATIONAL DEAL EXPERIENCE AND CROSS‐BORDER ACQUISITIONS

2016/06/07 by Caleb Stroup · 1 citation
Business, Management and Accounting · Economics, Econometrics and Finance · #Corporate Finance and Governance #Economic Policies and Impacts #International Business and FDI

paper · doi:10.1111/ecin.12365

openalex publication_date 2016/06/07 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/27

Abstract

I show that corporate directors' human capital facilitates international investments. Directors' experience with cross‐border transactions positively influences firms' decisions to conduct their first cross‐border acquisitions. Cross‐border acquirers are more likely to buy firms headquartered in countries with which the directors have prior deal experience. This effect is strongest for target firms headquartered in culturally and institutionally dissimilar countries. Announced cross‐border acquisitions are received more favorably by financial markets and are more likely to be completed successfully when the announcing firm has a director with cross‐border acquisition experience. These effects are not driven by investment bank involvement in the deal process or by other forms of directors' human capital, and they are robust to endogeneity of director hires. ( JEL F23, F21, J24, L23)

Citations

• Firm size and the gains from acquisitions
• Multinationals, multi-plant economies, and the gains from trade
• The Hubris Hypothesis of Corporate Takeovers
• The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey
• The value of independent directors: Evidence from sudden deaths☆
• The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation *
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• Separation of Ownership and Control
• Women in the boardroom and their impact on governance and performance☆

Cited by

• Board of directors [wikipedia]

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