International Deal Experience and Cross-Border Acquisitions
January 20, 2014
This paper shows that cross-border acquisition experience, gained by a director during prior service on another company's board, has a large positive impact on the probability that a company will conduct its first cross-border acquisition and on the choice of a foreign country in which to acquire a target. The effect of the presence of an experienced director on a company's first cross-border acquisition is larger for cross-border acquisitions of targets headquartered in countries that are institutionally, culturally, and geographically distant from the acquirer, consistent with the view that experienced directors facilitate a company's first cross-border acquisition. Announced cross-border acquisitions are received more favorably by financial markets and are more likely to be completed when the announcing firm has a current director with cross-border merger experience. These effects are attenuated when estimated on a sample of companies that previously conducted cross-border acquisitions.
Number of Pages in PDF File: 44
Keywords: Mergers and acquisitions, director experience, cross-border mergers, director characteristics, internationalization
JEL Classification: D83, G34, F23, J24, J62, L20, M16working papers series
Date posted: April 9, 2012 ; Last revised: August 7, 2014
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