Innovative Activity, Growth Options and the Heterogeneous Return Performance of Cross-border vs. Domestic M&A Firms

59 Pages Posted: 18 May 2020

See all articles by Luca Del Viva

Luca Del Viva

ESADE Business School

Roberto Ragozzino

University of Liverpool; University of Tennessee

Lenos Trigeorgis

University of Cyprus - Department of Public and Business Administration; King's College London; Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: April 21, 2020

Abstract

M&A deals in the US are done mostly at the domestic level. We examine the M&A performance of US acquirers during 1991-2014 based on the enhanced innovative capacity afforded by cross-border deals. We find that US firms engaging in cross-border M&A have superior innovative capacity, which results in lower short-term returns and downside risk. In contrast, long-run returns following cross-border acquisition are higher.

Keywords: acquisitions, mergers, international, equity return, real options, multinational network hypothesis

JEL Classification: G34, G11, G12

Suggested Citation

Del Viva, Luca and Ragozzino, Roberto and Trigeorgis, Lenos, Innovative Activity, Growth Options and the Heterogeneous Return Performance of Cross-border vs. Domestic M&A Firms (April 21, 2020). Available at SSRN: https://ssrn.com/abstract=3581584 or http://dx.doi.org/10.2139/ssrn.3581584

Luca Del Viva (Contact Author)

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

Roberto Ragozzino

University of Liverpool ( email )

Chatham Street
Liverpool, L69 7ZA
United Kingdom

HOME PAGE: http://https://www.liverpool.ac.uk/management/staff/roberto-ragozzino/

University of Tennessee ( email )

The Boyd Center for Business and Economic Research
Knoxville, TN 37996
United States

HOME PAGE: http://robertoragozzino.com

Lenos Trigeorgis

University of Cyprus - Department of Public and Business Administration ( email )

75 Kallipoleos Street
P.O. Box 20537
Nicosia CY-1678
Cyprus
00357 2 338762 (Phone)
00357 2 339063 (Fax)

King's College London ( email )

Strand
London, WC2R 2LS
United Kingdom

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

77 Massachusetts Ave. E62-663
Cambridge, MA 02142
United States

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