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Human development and cross-border acquisitions

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  • Owen, Sian
  • Yawson, Alfred
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    Abstract

    We examine the role of human development in US companies' decisions to engage in cross-border acquisitions. Utilizing the human development index (HDI) published by the United Nations Development Program (UNDP), we find that US firms make acquisitions in countries with strong HDI levels. Alternative factors such as institutional quality, life expectancy, telephone usage and school enrolments also have a positive influence on the cross-border acquisition decision. Further, we find a positive relationship between cross-border mergers and acquisitions (M&As) and HDI rankings relative to the United States. Our findings contribute to the literature that seeks to explain why so little capital flows from developed to developing economies.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Empirical Finance.

    Volume (Year): 17 (2010)
    Issue (Month): 4 (September)
    Pages: 689-701

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    Handle: RePEc:eee:empfin:v:17:y:2010:i:4:p:689-701

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    Web page: http://www.elsevier.com/locate/jempfin

    Related research

    Keywords: Mergers and acquisitions Foreign direct investment Human development Lucas Paradox;

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    Cited by:
    1. Owen, Sian & Yawson, Alfred, 2013. "Information asymmetry and international strategic alliances," Journal of Banking & Finance, Elsevier, vol. 37(10), pages 3890-3903.

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