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Family firms' cross-border mergers and acquisitions

Author

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  • Arena, Matteo P.
  • Dewally, Michaël
  • Jain, Bharat A.
  • Shao, Yingying

Abstract

We evaluate the link between family ownership and cross-border investment behavior. By analyzing a sample of 2000 large U.S. acquirers between 2001 and 2016, we empirically show that family firms are less active in the international market for corporate control. Unlike non-family firms, family firms generate positive cross-border acquisition returns. Our results also suggest that target country conditions and acquirer financing constraints influence the link between family ownership and cross-border acquisitiveness as well as its valuation consequences. Overall, we find evidence to indicate that reduced shareholder-manager agency conflicts in family firms result in value enhancing cross-border investment behavior.

Suggested Citation

  • Arena, Matteo P. & Dewally, Michaël & Jain, Bharat A. & Shao, Yingying, 2022. "Family firms' cross-border mergers and acquisitions," International Review of Financial Analysis, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:finana:v:82:y:2022:i:c:s1057521922001521
    DOI: 10.1016/j.irfa.2022.102191
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    More about this item

    Keywords

    Mergers & acquisitions; Family firm; International; Cross-border;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Z1 - Other Special Topics - - Cultural Economics

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