Abstract

http://ssrn.com/abstract=2309117
 
 

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International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions


Rui A. Albuquerque


Boston College, Carroll School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Luis Brandao Marques


International Monetary Fund - Monetary and Capital Markets Department

Miguel A. Ferreira


Nova School of Business and Economics; European Corporate Governance Institute (ECGI)

Pedro P. Matos


University of Virginia - Darden School of Business; European Corporate Governance Institute (ECGI)

October 18, 2015

European Corporate Governance Institute (ECGI) - Finance Working Paper No. 390/2014
Darden Business School Working Paper No. 2309117

Abstract:     
We test the hypothesis that foreign direct investment promotes corporate governance spillovers in the host country non-target firms. Using firm-level data from 22 countries, we find that cross-border M&A activity is associated with subsequent improvements in the governance of target firms’ rivals. The spillover is more pronounced when the acquirer’s country has stronger investor protection than the target’s country, and when the target operates in a competitive industry. Cross-border M&As also lead to increases in valuation and reductions in overinvestment of non-target firms. Our results suggest that the international market for corporate control promotes functional convergence in corporate governance.

Number of Pages in PDF File: 61

Keywords: Foreign direct investment, Corporate governance, Cross border mergers and acquisitions, Spillovers

JEL Classification: G32, G34, G38


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Date posted: August 13, 2013 ; Last revised: December 17, 2015

Suggested Citation

Albuquerque, Rui A. and Brandao Marques, Luis and Ferreira, Miguel A. and Matos, Pedro P., International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions (October 18, 2015). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 390/2014; Darden Business School Working Paper No. 2309117. Available at SSRN: http://ssrn.com/abstract=2309117 or http://dx.doi.org/10.2139/ssrn.2309117

Contact Information

Rui A. Albuquerque
Boston College, Carroll School of Management ( email )
140 Commonwealth Avenue
Chustnut Hill, MA 02467-3808
United States
HOME PAGE: http://ruialbuquerque.webs.com
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Luis Brandao Marques
International Monetary Fund - Monetary and Capital Markets Department ( email )
700 19th Street, N.W.
Washington, DC 20431
United States
2026238308 (Phone)
2025898308 (Fax)
Miguel Almeida Ferreira (Contact Author)
Nova School of Business and Economics ( email )
Campus de Campolide
Lisbon, 1099-032
Portugal
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Pedro P. Matos
University of Virginia - Darden School of Business ( email )
University of Virginia
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
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