International Deal Experience and Cross-border Acquisitions
November 28, 2014
This paper shows that firms' decisions to conduct their first cross-border acquisitions are positively influenced by experience with these transactions gained by their board members during prior service on other firms' boards. Cross-border acquirers are more likely to buy a foreign firm headquartered in the specific country with which a director has experience, with this effect being strongest for acquisitions of targets headquartered in culturally and institutionally dissimilar countries. Announced cross-border acquisitions are received more favorably by financial markets and are more likely to be completed successfully. These findings show that corporate directors' human capital facilitates international investments.
Number of Pages in PDF File: 57
Keywords: Cross-border Mergers and Acquisitions, Foreign Direct Investment, Boards of Directors, Human Capital
JEL Classification: F23, F21, J24, L23
Date posted: April 9, 2012 ; Last revised: December 6, 2015
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