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The effect of cross-border and domestic acquisitions on shareholder wealth: evidence from BRICS acquirers

Author

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  • Grigorieva S.

    (National Research University Higher School of Economics)

  • Morkovin R.

    (National Research University Higher School of Economics)

Abstract

The topic devoted to cross-border M&A performance has received wide attention in academic literature. Most existing studies examine wealth effects of international M&As in developed countries. We contribute to existing research by examining the market reaction to the announcements of M&As initiated by companies from BRICS countries over 2000-2012. We assess the long-term performance of M&A deals along with the short-term one and provide a copmarative analysis of company wealth gains in cross-border and domestic M&As. Based on the sample of 117 cross-border deals and 247 domestic M&As we find that foreign acquisitions outperform the domestic ones in the long run. We also find that main determinants of M&A performance are the acquirer’s FCFF, percentage change in the acquiring country's exchange rate against the target country currency during the acquisition year, and the level of interna-tional diversification of acquirers.

Suggested Citation

  • Grigorieva S. & Morkovin R., 2014. "The effect of cross-border and domestic acquisitions on shareholder wealth: evidence from BRICS acquirers," Journal of Corporate Finance Research Корпоративные финансы, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», issue 4 (32), pages 34-45.
    • Handle: RePEc:scn:026790:15693907
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    Citations

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    Cited by:

    1. Anastasia Stepanova & Vladislav Savelyev & Malika Shaikhutdinova, 2018. "The Anchoring Effect in Mergers and Acquisitions: Evidence from an Emerging Market," HSE Working papers WP BRP 63/FE/2018, National Research University Higher School of Economics.
    2. Irina Skvortsova & Anna Vershinina, 2021. "Do Cognitive Biases Impact M&A Performance in Emerging Markets? Evidence from Russian Firms," HSE Working papers WP BRP 82/FE/2021, National Research University Higher School of Economics.

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    Keywords

    CROSS-BORDER M&AS; DOMESTIC M&AS;

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