The influence of nations: A study of their effects on cross-border M&A

Abstract: Country-specific factors have far-reaching effects on everything from how nations operate to how their economies perform. In order to analyze their impacts on cross-border mergers and acquisitions, we utilize data from deals between 10 different countries within the time period of 2000 to 2014. Using multivariate regressions, we find that several macroeconomic factors, including corporate taxes and gross domestic product per capita, influence the bidder returns in the three year period following each deal. Furthermore, we also find statistically significant results when analyzing cultural factors and corporate governance standards. Moreover, our findings indicate that the results are more robust when the success measures are based on stock prices (CAR and BHAR) than earnings per share.