Abacus manuscript.pdf (940.13 kB)
Corporate multinationality and acquirer returns
journal contribution
posted on 2023-06-10, 03:29 authored by Henry Agyei-Boapeah, Samuel FosuSamuel Fosu, Collins G NtimThis paper provides evidence on how corporate multinationality from the perspective of acquiring firms relates to M&A returns. Using multivariate regressions and a large dataset of over 6,000 M&As (both cross-border and domestic) by UK firms during 1987 to 2014, the paper finds multinationality to be associated with significantly higher short-run announcement returns and long-run operating performance. While the multinationality premium (higher M&A returns for multinationals) persists over time, it seems to be restricted to firms with superior resource/managerial capabilities and minimal agency problems. Finally, the multinationality premium appears to be driven by foreign acquisitions into advanced economies. The results are robust to correcting for sample selection bias and controlling for several firm and deal characteristics, as well as accounting for firm-, industry-, and year-fixed effects. Collectively, the findings imply that multinationality could be a source of value creation for acquiring firms, particularly in foreign acquisitions, which tend to be complex, and, thereby, require superior managerial capabilities to succeed.
History
Publication status
- Published
File Version
- Accepted version
Journal
AbacusISSN
0001-3072Publisher
WileyExternal DOI
Issue
2Volume
56Page range
230-267Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2022-05-11First Open Access (FOA) Date
2022-05-11First Compliant Deposit (FCD) Date
2022-05-11Usage metrics
Categories
No categories selectedKeywords
Licence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC