Investor protection and value creation in cross‐border M&As by emerging economies

Abstract

Previous research investigating cross-border M&As (CBM&As) by emerging economies (EEs) provided contrasting evidence on the value enhancement role of investor protection rules. We conduct a new empirical study to address the issue with an accurate sample selection of bidders from more homogeneous developing countries and transactions on developed countries only. Our analysis over the [1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012] period on a sample of M&A deals by companies from Brazil, Russia, India, China, and South Africa (BRICS) does not provide evidence that better institutional standards in the destination country are rewarded by the local stock market. We find that foreign governance quality is not associated with positive excess stock returns around the announcement date. Rather, these returns are affected by firm-specific and dealspecific factors, such as the relative deal size, the listed status of the target company, and the acquirer size. Comparison with other studies on excess returns for emerging markets (including BRICs) suggests that the results could be driven at least partially by country choice.

Capital markets and performance of strategic corporate M&A – an investigation of value drivers

“…Oswal and Goel (2020), outline a strong negative relationship between the deal size in terms of price paid and bidder's returns around the announcement of transaction and in the days following it. Dell'Acqua et al (2018) confirm these findings for both developed and emerging markets outlining a significant positive relationship between relative size of bidder and target and abnormal returns of acquiring company.…”

The challenge of HR integration: a review of the M&A HR integration literature

“…System integration. System integration largely refers to mechanisms of task integration, containing aspects of language (Malik and Bebenroth, 2018), compliance or non-compliance (Dell'Acqua et al, 2018), organizational structure and process redefinition (Aklamanu et al, 2016). System involves factors of internal organization and external legitimacy.…”

Ownership concentration, investor protection and economic performance in public agroindustrial companies with the listing on warsaw stock exchange

“…There is a consensus among researchers that ownership concentration is closely associated with the protection of investors' rights in each specific jurisdiction, and in this case, property concentration is seen as a way to shield business against unlawful attempts to take over the business from the outside forces (DELL'ACQUA, et al, 2018…”

“…However, some researchers also suggest another assumption that the concentration of ownership and legal protection of shareholders are not necessarily substitutable but complementary ones (BURKART;PANUNZI, 2006;CASELLI;DI GIULI, 2010;DELL'ACQUA, et al, 2018;LARDON, et al, 2018;LEPORE, et al, 2017).…”

“…To conclude, the concentration of ownership is seen as an effective internal mechanism of corporate governance, which often leads to the suppression of other external corporate governance mechanisms such as financial markets, and may also lead to a decrease in the efficiency of other jurisdictions such as the legal system (BOUBAKRI, et al, 2005;HOLMSTRÖM;TIROLE, 1993) and matters for firm strategy, innovation, and performance (BHAUMIK;ESTRIN;MICKIEWICZ, 2017;BHAUMIK, et al, 2017;BOZEC, 2005;DELL'ACQUA, et al, 2018;DEMSETZ;VILLALONGA, 2001).…”