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International Deal Experience and Cross-Border Acquisitions

Caleb Stroup

Davidson College

September 12, 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, M16

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Date posted: April 9, 2012 ; Last revised: September 13, 2014

Suggested Citation

Stroup, Caleb, International Deal Experience and Cross-Border Acquisitions (September 12, 2014). Available at SSRN: http://ssrn.com/abstract=2037512 or http://dx.doi.org/10.2139/ssrn.2037512

Contact Information

Caleb Stroup (Contact Author)
Davidson College ( email )
Box 7123
Davidson, NC 28035
United States
HOME PAGE: http://www.calebstroup.net
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References:  106

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