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    Corporate Multinationality and Acquirer Returns

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    Corporate Multinationality and Acquirer Returns.docx (216.3Kb)
    Date
    2018-10-15
    Author
    Agyei-Boapeah, H.;
    Fosu, Samuel;
    Ntim, Collins G.
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    Abstract
    This paper provides evidence on how corporate multinationality from the perspective of acquiring firms relates to M&A returns. Using multivariate regressions and a large dataset of over 6,000 M&As (both cross-border and domestic) by UK firms during 1987 to 2014, the paper finds multinationality to be associated with significantly higher short-run announcement returns and long-run operating performance. While the multinationality premium (higher M&A returns for multinationals) persists over time, it seems to be restricted to firms with superior resource/managerial capabilities and minimal agency problems. Finally, the multinationality premium appears to be driven by foreign acquisitions into advanced economies. The results are robust to correcting for sample selection bias and controlling for several firm and deal characteristics, as well as accounting for firm-, industry-, and year-fixed effects. Collectively, the findings imply that multinationality could be a source of value creation for acquiring firms, particularly in foreign acquisitions, which tend to be complex, and thereby, require superior managerial capabilities to succeed.
    Description
    The file attached to this record is the author's final peer reviewed version.
    Citation : Agyei-Boapeah, H., Fosu, S. and Ntim, C.G. (2018) Corporate Multinationality and Acquirer Returns. Abacus, forthcoming
    URI
    http://hdl.handle.net/2086/16743
    DOI
    https://doi.org/10.1111/abac.12146
    ISSN : 0001-3072
    Research Group : FiBRe
    Research Institute : Finance and Banking Research Group (FiBRe)
    Peer Reviewed : Yes
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