Institutional mobility in global capital markets

53 Pages Posted: 13 Sep 2023

See all articles by Rachel M. Hayes

Rachel M. Hayes

University of Utah - David Eccles School of Business

Roger Silvers

University of Utah; European Corporate Governance Institute (ECGI)

Date Written: September 12, 2023


When financial conduct in one country intrudes on another country, country-level institutional features (e.g., securities laws and their enforcement) cease to be effective because of jurisdictional limitations. In this study, we focus on how fragmented regulatory authority exposes global capital market participants to expropriation and information risks. We explore securities regulators’ use of cooperative instruments. These instruments enable country-level institutional features to reach foreign jurisdictions. Using a powerful research design that controls for country-level factors (even time-variant ones), we find that cooperation is associated with the volume of deals in the cross-border merger and acquisition (M&A) market (in both number and dollar-value terms). Additional tests indicate larger effects of cooperation in country pairs where pre-cooperation M&A is scant (consistent with an extensive margin of investment). Moreover, we find that subtle and previously unexplored legal issues affect firm value in ways that refine the bonding hypothesis. Ultimately, we conclude that institutional features determined at the country-pair level are key determinants of economic outcomes in global markets.

Keywords: cross-border cooperation, M&A, regulatory networks, institutions, enforcement, legal frictions

Suggested Citation

Hayes, Rachel M. and Silvers, Roger, Institutional mobility in global capital markets (September 12, 2023). European Corporate Governance Institute – Finance Working Paper No. 932/2023, Available at SSRN: or

Rachel M. Hayes

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

Roger Silvers (Contact Author)

University of Utah ( email )

1655 E Campus Dr
SLC, UT 01003
United States


European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics