Publication: Financing decisions and gains from cross-border acquisitions by emerging-market acquirers
Issued Date
2015-09-01
Resource Type
ISSN
18736173
15660141
15660141
Other identifier(s)
2-s2.0-84930958782
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Mahidol University
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SCOPUS
Bibliographic Citation
Emerging Markets Review. Vol.24, (2015), 69-80
Suggested Citation
Bülent Aybar, Thanarerk Thanakijsombat Financing decisions and gains from cross-border acquisitions by emerging-market acquirers. Emerging Markets Review. Vol.24, (2015), 69-80. doi:10.1016/j.ememar.2015.05.008 Retrieved from: https://repository.li.mahidol.ac.th/handle/20.500.14594/35664
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Title
Financing decisions and gains from cross-border acquisitions by emerging-market acquirers
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Abstract
© 2015 Elsevier B.V. This study examines the valuation effect of the source of cash for acquisition financing and a set of determinants of bidder gains in the context of the cross-border acquisitions (CBAs) by emerging-market acquirers (EMAs) during 2000-2010. Our findings suggest that the CBAs create value for the EMAs but the value creation does not persist. We also found that the investors in emerging markets are aware of the agency cost of free cash flow and the market timing behavior of managers and thus react accordingly. Investors react more positively to large CBAs, the CBAs pursued by EMAs with prior local experience, the CBA of targets residing in a relative higher operational risk and the CBAs involving distant national cultures.