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Cross-Border M&A: Cultural Disparities and the Associated Wealth Effects

Author

Listed:
  • Fang (Helga) He

    (Department of Management, Southern Illinois University¡XCarbondale, U.S.A.)

  • Feng-Shun (Leo) Bin

    (Department of Business Administration, University of Illinois at Springfield, U.S.A.)

  • Dar-Hsin Chen

    (Department of Business Administration, National Taipei University, Taiwan)

Abstract

This study employs event-study methodologies to examine the stock price behaviors of US target firms surrounding the 1996¡V2005 cross-border M&A events related to corporate offers. We further apply factor analysis with country fixed-effect specifications to identify the determinants that may significantly contribute to the abnormal stock performance associated with cross-border M&A. While the sample target firms are all headquartered in the US, the foreign corporate bidders are grouped into various subsamples based on their countries of origin and presumably distinct cultures. Our evidence suggests that cultural disparities could play an important role in determining stock price performance around M&A public offer announcements.

Suggested Citation

  • Fang (Helga) He & Feng-Shun (Leo) Bin & Dar-Hsin Chen, 2008. "Cross-Border M&A: Cultural Disparities and the Associated Wealth Effects," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 7(2), pages 89-100, August.
    • Handle: RePEc:ijb:journl:v:7:y:2008:i:2:p:89-100
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    M&A; cultural disparities; event studies; wealth effects;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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