Český finanční a účetní časopis 2015(4):78-92 | DOI: 10.18267/j.cfuc.460

Impact of Cross-border Mergers and Acquisitions on Acquirers' Shareholders Wealth

Hoang Long Pham
Bc. Hoang Long Pham, MSc. - doktorand; Katedra financí a oceňování podniku, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze; nám. W. Churchilla 4, 130 67 Praha 3; <xphah01@vse.cz>.

The objective of this paper is to analyze the impact of cross-border merger and acquisitions on shareholders wealth of acquiring firms from developing countries with a focus on capital market integration. I examine whether announcement effects of takeovers differ for shareholders in developing countries with a developing capital market and highly growing economy from studies for developed markets. Data is used for TIMPS from the period 2000-2010 and standard event study methodology is used for this purpose. I find significant positive abnormal returns for acquirers. The study could be relevant for shareholders, global fund managers as well as financial regulators.

Keywords: Cross-border merger and acquisition; Event study analysis; TIMPS.
JEL classification: G30, G34

Published: December 1, 2015  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Pham, H.L. (2015). Impact of Cross-border Mergers and Acquisitions on Acquirers' Shareholders Wealth. Czech Financial and Accounting Journal, 2015(4), 78-92. doi: 10.18267/j.cfuc.460
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Alexandridis, G. - Petmezas, D. - Travlos, N. G. (2010): Gains from Mergers and Acquisitions around the World: New Evidence. Financial Management, 2010, roč. 39, č. 4, s. 1671-1695. Go to original source...
    2. Aybar, B. - Ficici, A. (2009): Cross-Border Acquisitions and Firm Value: An Analysis of Emerging-Market Multinationals. Journal of International Business Studies, 2009, roč. 40, č. 8, s. 1317-1338. Go to original source...
    3. Bhagat, S. - Malhotra, S. - Zhu, P. C. (2011): Emerging Country CrossBorder Acquisitions: Characteristics, Acquirer Returns and CrossSectional Determinants. Emerging Markets Review, 2011, roč. 13, č. 2, s. 250-271. Go to original source...
    4. Boateng, A. - Wang, Q. - Yang, T. L. (2008): Cross-Border M&As by Chinese Firms: An Analysis of Strategic Motives and Performance. Thunderbird International Business Review, 2008, roč. 50, č. 4, s. 259-270. Go to original source...
    5. Bruner, R. (2004): Applied Mergers and Acquisitions. Hoboken, Wiley, 2004.
    6. Buckley, P. J. - Ghauri, P. N. (2004): Globalization,Economic Geography and the Strategy of Multinational Enterprises. Journal of International Business Studies, 2004, roč. 35, č. 2, s. 81-98. Go to original source...
    7. Campa, J. - Hernando, I. (2004): Shareholder Value Creation in European M&As. European Financial Management, 2004, roč. 10, č. 1, s. 47-81. Go to original source...
    8. Danbolt, J. - Maciver, G. (2012): Cross-Border versus Domestic Acquisitions and the Impact on Shareholder Wealth, Journal of Business Finance and Accounting, 2012, roč. 39, č. 7, s. 1028-1067. Go to original source...
    9. Francis, B. B. - Hasan, I. - Sun, X. (2008): Financial Market Integration and the Value of Global Diversification: Evidence for US Acquirers in Cross-Border Mergers and Acquisitions, Journal of Banking & Finance, 2008, roč. 32, č. 8, s. 1522-1540. Go to original source...
    10. Goddard, J. - Molyneux, P. - Zhou, T. (2011): Bank Mergers and Acquisitions in Emerging Markets: Evidence from Asia and Latin America. European Journal of Finance, 2011, roč. 18, č. 5, s. 419-438. Go to original source...
    11. Goergen, M. - Renneboog, L. (2004): Shareholder Wealth Effects of European Domestic and Cross-Border Takeover Bids, European Financial Management, 2004, roč. 10, č. 1, s. 9-45. Go to original source...
    12. Gubbi, S. - Aulakh, R. P. - Sarkar, M. B. - Chittoor, R. (2010): Do International Acquisitions by Merging Economy Firms Create Shareholder Value? The Case of Indian Firms. Journal of International Business Studies, 2010, roč. 41, č. 3, s. 397-418. Go to original source...
    13. Chari, A. - Ouimet, P. - Tesar, L. (2010): The Value of Control in Emerging Markets. Review of Financial Studies, 2010, roč. 23, č. 4, s. 1741-1770. Go to original source...
    14. Chen, Y. Y. - Young, M. N. (2010): Cross-Border Mergers and Acquisitions by Chinese Listed Companies: A Principle-Principle Perspective. Asia Pacific Journal of Management, 2010, roč. 27, č. 3, s. 523-539. Go to original source...
    15. Kohli, R. - Mann, B. J. S. (2011): Analyzing Determinants of Value Creation in Domestic and Cross-Border Acquisitions in India. International Business Review, 2011, roč. 21, č. 6, s. 998-1016. Go to original source...
    16. Lowinski, F. - Schiereck, D. - Thomas, W. (2004): The Effect of CrossBorder Acquisitions on Shareholder Wealth- Evidence from Switzerland, Review of Quantitative Finance and Accounting, 2004, roč. 22 č. 4, s. 315330. Go to original source...
    17. Ma, J. - Pagan, J. A. - Chu, Y. (2009): Abnormal Returns to Mergers and Acquisitions in Ten Asian Stock Markets, International Journal of Economic, 2009, roč. 14, č. 3, s. 236-250.
    18. Mann, B. J. S. - Kohli, R. (2011): Target Shareholders' Wealth Creation in Domestic and Cross-border Acquisitions in India. International Journal of Commerce and Management, 2011, roč. 21 č. 1, s. 63-81. Go to original source...
    19. Martynova, M. - Renneboog, L. (2008): A Century of Corporate Takeovers: What Have We Learned and Where Do We Stand? Journal of Banking & Finance, 2008, roč. 32, č. 10, s. 2148-2177. Go to original source...
    20. Moeller, S. B. - Schlingemann, F. P. (2005): Global Diversification and Bidder Gains: A Comparison between Cross-Border and Domestic Acquisitions. Journal of Banking and Finance, 2005, roč. 29, č. 3, s. 533-564. Go to original source...
    21. Mulherin, J. H. - Boone, A. L. (2000): Comparing Acquisitions and Divestitures, Journal of Corporate Finance, 2000, roč. 6, č. 2, s. 117-139. Go to original source...
    22. Oelger, M. - Schiereck, D. (2011): Cross-Border M&As and Stock Market Integration - Evidence from Turkey Market, International Journal of Economics and Research, 2011, roč. 2, č. 3, s. 40-55.
    23. Rahahleh, N. A. - Wei, P. P. (2012): The Performance of Frequent Acquirers: Evidence from Emerging Markets. Global Finance Journal, 2012, roč. 23, č. 1, s. 16-33. Go to original source...
    24. Renze-Westendorf, M. - Schiereck, D. - Zeidler, F. (2009): Cross-Border Acquisitions and Shareholder Wealth-Evidence from Spain, Management Research, 2009, roč. 7, č. 2, s. 127-140. Go to original source...
    25. Schwert, G. W. (1996): Markup Pricing in Mergers and Acquisitions, Journal of Financial Economics, 1996, roč. 41, č. 2, s. 153-192. Go to original source...
    26. UNCTAD (2015): World Investment Report 2015: Annex Tables. [on-line], Geneva, United Nations Conference on Trade and Development, c2015, [cit. 20. 10. 2015], <http://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Annex-Tables.aspx>.
    27. Wong, A. - Cheung, K. Y. (2009): The Effects of Merger and Acquisition Announcements on the Security Prices of Bidding Firms and Target Firms in Asia, International Journal of Economics and Finance, 2009, roč. 1, č. 2, s. 274-283. Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content