Abstract

http://ssrn.com/abstract=2265263
 
 

References (39)



 
 

Citations (1)



 


 



Corporate Governance Reforms Around the World and Cross-Border Acquisitions


E. Han Kim


University of Michigan, Stephen M. Ross School of Business

Yao Lu


Tsinghua University - School of Economics & Management

May 15, 2013

Ross School of Business Paper No. 1189

Abstract:     
This paper provides comprehensive, detailed documentation of major corporate governance reforms (CGRs) undertaken by 26 advanced and emerging economies. Have these reforms impacted corporate investment decisions by altering investor protection (IP)? To answer this question, we estimate the CGRs’ impacts on foreign acquirers’ tendency to pick better performing firms in emerging markets. We argue the cherry picking is partly due to emerging countries’ weaker IP than acquirer countries’, predicting a positive relation between the degree of cherry picking and the gap in the strength of IP. If the CGRs strengthen IP, the gap will decrease (increase) following a CGR in a target’s (acquirer’s) country, moderating (intensifying) the cherry picking tendency. This is what we find when we estimate difference-in-differences in cherry picking before and after a CGR. These results not only demonstrate the CGRs’ impacts, but also imply the IP gap between capital exporting and importing countries distorts firm-level allocation of foreign capital inflows and reduces the benefits of globalization.

Number of Pages in PDF File: 40

Keywords: Corporate Governance Reforms, Investor Protection, Target Selection, Control Premiums

JEL Classification: F21, G34, K22

working papers series


Download This Paper

Date posted: May 15, 2013 ; Last revised: July 23, 2013

Suggested Citation

Kim, E. Han and Lu, Yao, Corporate Governance Reforms Around the World and Cross-Border Acquisitions (May 15, 2013). Ross School of Business Paper No. 1189. Available at SSRN: http://ssrn.com/abstract=2265263 or http://dx.doi.org/10.2139/ssrn.2265263

Contact Information

E. Han Kim (Contact Author)
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-764-2282 (Phone)
734-763-3117 (Fax)
Yao Lu
Tsinghua University - School of Economics & Management ( email )
Beijing, 100084
China
Feedback to SSRN


Paper statistics
Abstract Views: 932
Downloads: 250
Download Rank: 69,365
References:  39
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.313 seconds