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CEO country-specific experience and cross-border mergers and acquisitions

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  • Ding, Haoyuan
  • Hu, Yichuan
  • Li, Chang
  • Lin, Shu

Abstract

We provide evidence that U.S. firms have a significantly higher probability of acquiring targets in countries where their CEOs have studied or worked. This finding is robust to alternative measures of CEO country-specific experience, samples or model specifications, and to controlling for endogeneity and target country industry specialization. Moreover, deal-level evidence suggests a reassurance effect. CEO experience has no effect on announcement returns or long-run operating performance on average but is associated with significantly better performance in risky environments. We also provide additional evidence to disentangle alternative hypotheses and explore the role of corporate governance in determining deal outcomes.

Suggested Citation

  • Ding, Haoyuan & Hu, Yichuan & Li, Chang & Lin, Shu, 2021. "CEO country-specific experience and cross-border mergers and acquisitions," Journal of Corporate Finance, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:corfin:v:69:y:2021:i:c:s0929119921001619
    DOI: 10.1016/j.jcorpfin.2021.102039
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    More about this item

    Keywords

    Country-specific experience; Cross-border mergers and acquisitions; Reassurance effect; Corporate governance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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