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Are cross-border Mergers and Acquisitions more successful between culturally similar countries in the EU?

An empirical study on the shareholder wealth effects of European acquirers

Master's Thesis 2017 75 Pages

Business economics - General

Summary

Cross-border mergers and acquisitions have increased significantly over the last two decades and have substantially changed the European industry, since it has become one of the leading approaches for firms to gain access to global markets. However, there has been little progress in the research literature investigating the role of culture in explaining the success of these cross-border transactions. This paper analyzes if cross-border M&As are more valuable for acquirers between culturally similar countries by investigating the countries’ cultural distance, legal origin, trust, Hofstede’s dimensions, and corporate governance measures. The results indicate that cultural distance has a positive and negative effect on bidder announcement returns. Legal origin has a negative effect on acquirer gains in cross-border M&A whereas trust has a positive but insignificant effect. Hofstede’s dimensions have no particular effect on the data set and corporate governance measures have a strong negative effect on bidder announcement returns. The robustness checks do not alter the results.

Details

Pages
75
Year
2017
ISBN (eBook)
9783668540071
File size
858 KB
Language
English
Catalog Number
v376711
Institution / College
Maastricht University – Finance
Grade
7.00
Tags
mergers acquisitions european

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Title: Are cross-border Mergers and Acquisitions more successful between culturally similar countries in the EU?