CEO International Background and Cross-Border M&As

74 Pages Posted: 28 Nov 2020

See all articles by Busra Agcayazi

Busra Agcayazi

West Virginia University

Ann Marie Hibbert

West Virginia University - Department of Finance

Thibaut G. Morillon

Elon University

Date Written: May 1, 2020


We investigate whether having a CEO with international background affects U.S. firms’ cross-border merger and acquisition (M&A) activities. By defining international background as having: a non-U.S. nationality, overseas education, or overseas work-experience, we find that when a CEO has these characteristics, the firm is more likely to acquire international targets and these deals are more likely to be value-enhancing. Moreover, our results indicate that having multiple dimensions of international background (as opposed to one), for example, having both overseas education and work experience, increases the likelihood, and announcement returns of cross-border deals. The observed gains are largely from greater due diligence, lower acquisition premiums, and greater likelihood of financing the deal with stocks. We also find that firms typically undertake their first cross-border acquisition within five years of hiring a CEO with international background, suggesting that this may be a strategic decision of U.S. firms when they plan to expand their operations overseas.

Keywords: CEO International Background, Mergers and Acquisitions, Cross-Border M&As, Familiarity

JEL Classification: G34, G41, M12, G15, M14

Suggested Citation

Agcayazi, Busra and Hibbert, Ann Marie and Morillon, Thibaut, CEO International Background and Cross-Border M&As (May 1, 2020). Available at SSRN: or

Busra Agcayazi (Contact Author)

West Virginia University ( email )

PO Box 6025
Morgantown, WV 26506
United States

Ann Marie Hibbert

West Virginia University - Department of Finance ( email )

Morgantown, WV 26506
United States

Thibaut Morillon

Elon University ( email )

Elon, NC 27244
United States

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