재무연구 제 권 호 (2010년 5월)
Asian Review of Financial Research, Vol., No..
pp.115~152
pp.115~152
Determinants of Target Selection and Acquirer Returns : Evidence from Cross-Border Acquisitions
Sung C. Bae Ashel G. Bryan/Huntington Bank Professor in the Department of Finance, College of Business Administration, Bowling Green State University, Bowling Green
Kiyoung Chang Assistant Professor of Finance at the School of Business and Economics, Indiana University South Bend, South Bend
Doseong Kim Associate Professor of Finance at the College of Business Administration, Sogang University, Seoul, Korea
We examine cross-border acquisitions of private and public targets by U.S. firms by employing self selection models. We are particularly interested in the roles of country-level liquidity and transparency in cross-border acquisitions. Our results show that a typical acquisition deal of a private target is smaller in size, uses cash less frequently for payment, and involves more hightech firms than that of a public target. Most importantly, we find that acquiring firms are more likely to buy private targets in lower-transparency countries, but the level of country liquidity has little effect on the target selection. Furthermore, after accounting for the endogeneity bias associated with target selection, country liquidity is shown to be no longer a key determinant of acquirer returns in cross-border acquisitions. Our results are robust to alternative specifications of dependent variables and self selection models.
Sung C. Bae
Kiyoung Chang
Doseong Kim
We examine cross-border acquisitions of private and public targets by U.S. firms by employing self selection models. We are particularly interested in the roles of country-level liquidity and transparency in cross-border acquisitions. Our results show that a typical acquisition deal of a private target is smaller in size, uses cash less frequently for payment, and involves more hightech firms than that of a public target. Most importantly, we find that acquiring firms are more likely to buy private targets in lower-transparency countries, but the level of country liquidity has little effect on the target selection. Furthermore, after accounting for the endogeneity bias associated with target selection, country liquidity is shown to be no longer a key determinant of acquirer returns in cross-border acquisitions. Our results are robust to alternative specifications of dependent variables and self selection models.
