International Deal Experience and Cross-Border Acquisitions

57 Pages Posted: 9 Apr 2012 Last revised: 6 Aug 2017

Multiple version iconThere are 2 versions of this paper

Date Written: November 28, 2015


I show that corporate directors' human capital facilitates international investments. Directors' experience with cross-border transactions positively influences firms' decisions to conduct their first cross-border acquisitions. Cross-border acquirers are more likely to buy firms headquartered in countries with which the directors have prior deal experience. This effect is strongest for target firms 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 when the announcing firm has a director with cross-border acquisition experience. These effects are not driven by investment bank involvement in the deal process or by other forms of directors' human capital, and they are robust to endogeneity of director hires.

Keywords: Cross-border Mergers and Acquisitions, Foreign Direct Investment, Boards of Directors, Human Capital

JEL Classification: F23, F21, J24, L23

Suggested Citation

Stroup, Caleb, International Deal Experience and Cross-Border Acquisitions (November 28, 2015). Economic Inquiry, Forthcoming. Available at SSRN: or

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