Cross-border acquisitions and firm value: An analysis of emerging-market multinationals

Journal of International Business Studies

Volumn 40, Issue 8, 2009, Pages 1317-1338

  Aybar, Bülent ^a   Ficici, Aysun ^a  

^a SOUTHERN NEW HAMPSHIRE UNIVERSITY   (United States)

Author keywords

Cross border mergers and acquisitions; Emerging market multinationals; Firm value; Foreign direct investment; International investments; Internationalization

Indexed keywords

EID: 70349308589     PISSN: 00472506     EISSN: 14786990     Source Type: Journal    
DOI: 10.1057/jibs.2009.15     Document Type: Article

References (72)

1. Ahimud, Y., & Lev, B. 1981. Risk reduction as a managerial motive for conglomerate mergers. Bell Journal of Economics, 12(2): 605-617.
2. Almeida, P., & Kogut, B. 1999. Localization of knowledge and the mobility of engineers in regional networks. Management Science, 45(7): 905-918.
3. Antia, M. J., Lin, B., & Pantzalis, C. 2007. Cultural distance and valuation of multinational corporations. Journal of Multinational Financial Management, 17(5): 365-383.
4. Barkema, H. G., & Vermeulen, F. 1998. International expansion through start-up or acquisition: A learning perspective. Academy of Management Journal, 41(1): 7-26.
5. Barkema, H. G., Bell, H. J. H., & Pennings, J. M. 1996. Foreign entry, cultural barriers, and learning. Strategic Management Journal, 17(2): 151-166.
6. Beamish, P. W., & Banks, J. C. 1987. Equity joint ventures and the theory of the multinational enterprise. Journal of International Business Studies, 18(2): 1-16.
7. Branstetter, L. 2001. Are knowledge spillovers international or intranational in scope? Microeconometric evidence from the US and Japan. Journal of International Economics, 53(1): 53-79.
8. Brock, D. M. 2005. Multinational acquisition integration: The role of national culture in creating synergies. International Business Review, 14(3): 269-288.
9. Brouthers, K. D. 2002. Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies, 33(2): 203-221.
10. Brouthers, K. D., & Brouthers, L. E. 2000. Acquisition or greenfield start-up? Institutional, cultural and transaction cost influences. Strategic Management Journal, 21(1): 89-97.
11. Buckley, P., & Casson, M. 1976. The future of the multinational enterprise. London: Macmillan.
12. Caves, R. E. 1971. International corporations: The industrial economics of foreign investment. Economica, 38(149): 1-27.
13. Caves, R. E. 1998. Research on international business: Problems and prospects. Journal of International Business Studies, 29(1): 5-19.
14. Chari, A., Ouimet, P. P., & Tesar, L. 2004. Acquiring control in emerging markets: Evidence from the stock market, Working Paper 10872, National Bureau of Economic Research.
15. Choi, J., & Russell, J. S. 2004. Economic gains around mergers and acquisitions in the construction industry of the United States of America. Journal of Civil Engineering, 31(3): 513-525.
16. Click, R. W., & Harrison, P. 2000. Does multinationality matter? Evidence of value destruction in US multinational corporations, FEDS Working Paper 2000-2021, Federal Reserve System.
17. Coutts, J. A., Mills, T. C., & Roberts, J. 1995. Testing cumulative prediction errors in event study methodology. Journal of Forecasting, 14(2): 107-115.
18. Coval, J. D., & Moskowitz, T. J. 2001. The geography of investment: Informed trading and asset prices. Journal of Political Economy, 109(4): 811-841.
19. Denis, D. J., Denis, D. K., & Yost, K. 2001. Global diversification, industrial diversification, and firm value. Journal of Finance, 57(5): 1951-1979.
20. Doukas, J., & Travlos, N. 1988. The effect of corporate multinationalism on shareholders' wealth: Evidence from international acquisitions. Journal of Finance, 43(5): 1161-1175.
21. Eden, L., & Miller, S. R. 2004. Distance matters: Liability of foreignness, institutional distance and ownership, Bush School Working Paper 404, Texas A&M University.
22. Errunza, V. R., & Senbet, L. W. 1981. The effects of international operations on the market value of the firm: Theory and evidence. Journal of Finance, 36(2): 401-417.
23. Errunza, V. R., & Senbet, L. W. 1984. International corporate diversification, market valuation, and size-adjusted evidence. Journal of Finance, 39(3): 727-742.
24. Fuller, K., Netter, J., & Stegemoller, M. 2002. What do returns to acquiring firms tell us? Evidence from firms that make many acquisitions. Journal of Finance, 57(4): 1763-1793.
25. Geringer, J. M., & Hebert, L. 1989. Control and performance of international joint ventures. Journal of International Business Studies, 20(2): 235-254.
26. Ghemawat, P. 2001. Distance still matters: The hard reality of global expansion. Harvard Business Review, 79(9): 137-147.
27. Hanvanich, S., & Cavusgil, S. T. 2001. Stock market reactions to international joint venture announcement: An event analysis. International Business Review, 10(2): 139-154.
28. Harzing, A. 2002. Acquisitions versus greenfield investments: International strategy and management of entry modes. Strategic Management Journal, 23(3): 211-227.
29. Hitt, M. A., Hoskisson, R. E., & Ireland, D. R. 2001a. A mid-range theory of the interactive effects of international and product diversification on innovation and performance. Journal of Management, 20(2): 297-326.
30. Hitt, M. A., Ireland, R. D., Camp, S. M., & Sexton, D. L. 2001b. Strategic entrepreneurship: Entrepreneurial strategies for wealth creation. Strategic Management Journal, 22(6-7): 479-491.
31. Hofstede, G. H. 1980. Culture's consequences: International differences in work-related values. London: Sage Publications.
32. Hofstede, G. H. 1984. Cultural dimensions in management and planning. Asia Pacific Journal of Management, 1(2): 81-99.
33. Hymer, H. S. 1976. The international operations of national firms: A study of foreign direct investment. Cambridge, MA: MIT Press.
34. Jensen, M. C. 1986. Agency costs of free cash flow, corporate finance and takeovers. American Economic Review, 76(2): 323-329.
35. Kearey, P., & Vine, F. J. 1996. Global tectonics. New York: Blackwell Science.
36. Keller, W. 2002. Geographic localization of international technology diffusion. American Economic Review, 92(1): 120-143.
37. Keohane, R., & Nye, J. S. 2000. Globalization: What's new? What's not? (And so what?). Foreign Policy, 118(Spring): 104-119.
38. Khanna, T., & Palepu, K. 1997. Why focused strategies may be wrong for emerging markets. Harvard Business Review, 75(4): 41-51.
39. Khanna, T., & Palepu, K. 1999. The right way to restructure conglomerates in emerging markets. Harvard Business Review, 77(4): 125-134.
40. Kissin, W. D., & Herrera, J. 1990. International mergers and acquisitions. Journal of Business Strategy, 11(4): 51-54.
41. Kogut, B. 1983. Managing political risk assessment. Sloan Management Review, 24(4): 71-73.
42. Kogut, B., & Singh, H. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19(3): 411-432.
43. Krugman, P. 1991. Increasing returns and economic geography. Journal of Political Economy, 99(3): 483-499.
44. Lamacchia, T. F. 1997. Cross-border M&A: A guide to global strategic direct investment for Asian companies. Hong Kong: Asia Law & Practice Publishing.
45. La Porta, R., Lopez de Silanes, F., Shleifer, A., & Vishny, R. 1998. Law and finance. Journal of Political Economy, 106(6): 1113-1155.
46. Markides, C. C., & Ittner, C. D. 1994. Shareholder benefits from corporate international diversification: Evidence from US international acquisitions. Journal of International Business Studies, 25(2): 343-366.
47. Martin, X., Swaminathan, A., & Mitchell, W. 1998. Organizational evolution in the interorganizational environment: Incentives and constraints on international expansion strategy. Administrative Science Quarterly, 43(3): 566-601.
48. Matsusaka, J. G., & Nanda, V. 1996. Internal capital markets and corporate refocusing, Working paper, University of Southern California.
49. McWilliams, A., & Siegel, D. 1997. Event studies in management research: Theoretical and empirical issues. Academy of Management Journal, 40(3): 636-657.
50. Meyer, M., Milgrom, P., & Roberts, R. 1992. Organizational prospects, influence costs and ownership changes. Journal of Economics and Management Strategy, 1(1): 9-35.
51. Morck, R. A., & Yeung, B. 1991. Why investors value multinationality. Journal of Business, 64(2): 165-187.
52. Morck, R. A., & Yeung, B. 1992. Internalization: An event-study test. Journal of International Economics, 33(1-2): 41-56.
53. Mulherin, J. H., & Boone, A. L. 2000. Comparing acquisitions and divestitures. Journal of Corporate Finance, 6(2): 117-139.
54. Penrose, E. T. 1959. The theory of the growth of the firm. Oxford: Basil Blackwell.
55. Rajan, R. G., & Zingales, L. 1995. What do we know about capital structure? Some evidence from international data. Journal of Finance, 50(5): 1421-1460.
56. Rajan, R. G., Servaes, H., & Zingales, L. 2000. The cost of diversity: The diversification discount and inefficient investment. Journal of Finance, 55(1): 35-80.
57. Rieck, O. 2002. Value creation in international telecom acquisitions, Working Paper, Nanyang Business School.
58. Robusto, C. C. 1957. The cosine-haversine formula. The American Mathematical Monthly, 64(1): 38-40.
59. Roll, R. 1988. The hubris hypothesis of corporate takeovers. Journal of Business, 59(2): 197-216.
60. Sauvant, P. K. 2008. The rise of TNCs from emerging markets: The issues. In Sauvant, K.P. (ed.), The rise of transnational corporations from emerging markets: Threat or opportunity?: 3-14. Northampton, MA: Edward Elgar.
61. Scharfstein, D. S., & Stein, J. C. 2000. The dark side of internal capital markets: Divisional rent-seeking and inefficient investment. Journal of Finance, 55(6): 2537-2564.
62. Shimizu, K., Hitt, M. A., Vaidyanath, D., & Pisano, V. 2004. Theoretical foundations of cross-border mergers and acquisitions: A review of current research and recommendations for the future. Journal of International Management, 10(3): 307-353.
63. Shrivastava, P. 1986. Rigor and practical usefulness of research in strategic management. Strategic Management Journal, 8(1): 77-92.
64. Stein, J. C. 1997. Internal capital markets and the competition for corporate resources. Journal of Finance, 52(1): 111-133.
65. Storper, M., & Venables, A. J. 2004. Buzz: Face-to-face contact and the urban economy. Journal of Economic Geography, 4(4): 351-370.
66. Stulz, R. M. 1990. Managerial discretion and optimal financing policies. Journal of Financial Economics, 26(1): 3-27.
67. United Nations. 1999. World investment report on foreign direct investment and the challenges of development. Geneva: United Nations.
68. United Nations. 2000. World investment report on cross-border mergers and acquisitions and development. Geneva: United Nations.
69. United Nations. 2001. World investment report on promoting linkages. Geneva: United Nations.
70. United Nations. 2002. World investment report on transnational corporations and export competitiveness. Geneva: United Nations.
71. Williamson, O. E. 1979. Transaction-cost economics: The governance of contractual relations. Journal of Law and Economics, 22(2): 233-261.
72. Yeganeh, H., & Su, Z. 2006. Conceptual foundations of cultural management research. International Journal of Cross-Cultural Management, 6(3): 361-376.