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CEO International Background and Cross-Border M&As

Author

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  • Agcayazi, Busra
  • Hibbert, Ann Marie
  • Morillon, Thibaut G.

Abstract

We investigate whether having a CEO with an international background affects U.S. firms’ cross-border merger and acquisition (M&A) activities. By defining international background as having either non-U.S. nationality, overseas education, or foreign work experience, we provide robust evidence that when a CEO possesses these characteristics, a firm is more likely to acquire international targets, and these deals are more value-enhancing. Moreover, our results indicate that when a firm’s CEO has all of these international characteristics (compared to just one), both the likelihood of cross-border deals and announcement returns increase. The observed gains are related, at least in part, to CEOs with this background being associated with lower acquisition premium and mitigating the negative impact of paying for these deals with equity.

Suggested Citation

  • Agcayazi, Busra & Hibbert, Ann Marie & Morillon, Thibaut G., 2024. "CEO International Background and Cross-Border M&As," Journal of Banking & Finance, Elsevier, vol. 164(C).
    • Handle: RePEc:eee:jbfina:v:164:y:2024:i:c:s0378426624000499
    DOI: 10.1016/j.jbankfin.2024.107129
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    More about this item

    Keywords

    Cross-Border M&As; CEO Background; International CEOs; Mergers and Acquisitions;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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