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International Deal Experience and Cross-Border Mergers

Caleb Stroup

Grinnell College

January 20, 2014

This paper shows that a director's cross-border deal experience, gained during prior service on another firm's board, has a large positive impact on the decision to conduct a first cross-border merger and on the choice of target country. A cross-border merger announced by a firm without a cross-border merger record is less likely to fail and is received more favorably by financial markets when it is exposed to cross-border deal experience through the board of directors. These impacts are amplified for acquisitions of targets headquartered in unfamiliar countries but significantly muted when at firms with a prior cross-border dealmaking record. Collectively, these findings suggest that an individual director's cross-border deal experience reflects a form of valuable human capital, in contrast to a mere predisposition to conduct familiar investments.

Number of Pages in PDF File: 47

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: February 14, 2014

Suggested Citation

Stroup, Caleb, International Deal Experience and Cross-Border Mergers (January 20, 2014). Available at SSRN: http://ssrn.com/abstract=2037512 or http://dx.doi.org/10.2139/ssrn.2037512

Contact Information

Caleb Stroup (Contact Author)
Grinnell College ( email )
P.O. Box 805
Grinnell, IA 50112
United States
HOME PAGE: http://www.calebstroup.net
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