Cross-Border Mergers and Acquisitions for Innovation Opportunities

59 Pages Posted: 24 Jun 2013 Last revised: 30 Apr 2016

See all articles by Po-Hsuan Hsu

Po-Hsuan Hsu

National Tsing Hua University - Department of Quantitative Finance

Peng Huang

University of New South Wales - Australian School of Business

Mark Humphery-Jenner

UNSW Business School; Financial Research Network (FIRN)

Ronan Powell

University College Dublin (UCD) - Michael Smurfit Graduate School of Business

Date Written: June 20, 2013

Abstract

We empirically examine if firms initiate cross-border mergers and acquisitions (M&As) to pursue overseas innovation opportunities. Our deal-level evidence suggests that innovative firms in low innovation countries are more likely to undertake cross-border deals and target innovative targets when doing so in comparison with innovative firms in high innovation countries. Moreover, we find that these cross-border M&As earn higher announcement stock returns from these deals when compared to domestic deals. Our empirical evidence suggests that the acquisition of innovation is an important and value-enhancing driver of cross-border takeovers.

Keywords: Innovation, mergers, acquisitions, cross-border

JEL Classification: G34

Suggested Citation

Hsu, Po-Hsuan and Huang, Peng and Humphery-Jenner, Mark and Powell, Ronan G., Cross-Border Mergers and Acquisitions for Innovation Opportunities (June 20, 2013). 26th Australasian Finance and Banking Conference 2013; Asian Finance Association (AsianFA) 2014 Conference Paper. Available at SSRN: https://ssrn.com/abstract=2282430 or http://dx.doi.org/10.2139/ssrn.2282430

Po-Hsuan Hsu

National Tsing Hua University - Department of Quantitative Finance ( email )

101, Section 2, Kuang-Fu Road
Hsinchu, Taiwan 300
China

Peng Huang

University of New South Wales - Australian School of Business ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Mark Humphery-Jenner (Contact Author)

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Ronan G. Powell

University College Dublin (UCD) - Michael Smurfit Graduate School of Business ( email )

Blackrock, Co. Dublin
Ireland

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