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Enhancing the Benefits for India and Other Developing Countries in the Doha Development Agenda Negotiations

Author

Listed:
  • Anusha Chari

    (University of Michigan)

  • Paige P. Ouimet

    (University of Michiganr Outsourcing)

  • Linda L. Tesar

    (University of Michiganr Outsourcing and NBER)

Abstract

When firms from developed markets acquire firms in emerging markets, marketcapitalization-weighted monthly joint returns show a statistically significant increase of 1.8%. Panel data estimations suggest that the value gains from cross-border M&A transactions stem from the transfer of majority control from emerging-market targets to developed market acquirers—joint returns range from 5.8% to 7.8% when majority control is acquired. Announcement returns for acquirer and target firms estimate the distribution of gains and show a statistically significant increase of 2.4% and 6.9%, respectively. The evidence suggests that the stock market anticipates significant value creation from cross-border transactions that involve emerging-market targets leading to substantial gains for shareholders of both acquirer and target firms.

Suggested Citation

  • Anusha Chari & Paige P. Ouimet & Linda L. Tesar, 2004. "Enhancing the Benefits for India and Other Developing Countries in the Doha Development Agenda Negotiations," Working Papers 511, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:511
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    File URL: http://fordschool.umich.edu/rsie/workingpapers/Papers501-525/r511.pdf
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    References listed on IDEAS

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    Cited by:

    1. Alan V Deardorff & Robert M. Stern, 2004. "Designing a Pro-Active Stance for India in the Doha Development Agenda Negotiations," Working Papers 521, Research Seminar in International Economics, University of Michigan.

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