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The impact of country risk ratings on U.S. firms in large cross-border acquisitions

  • Kiymaz, Halil
Registered author(s):

    This study investigates the impact of country risk ratings on the wealth gains to large U.S. bidders involved in cross-border acquisitions. The findings indicate that U.S. bidders experience positive wealth gains during the merger announcements, though this is concentrated in transactions involving European targets. There are also differences in wealth gains to bidders with respect to industry classification and location of foreign targets. The country risk factors including economic, political, and financial risk ratings all play a significant role in explaining the wealth gains to bidders. Furthermore, the wealth gains are higher for the firms with acquisitions in developed countries and are significantly related to GNP growth rate.

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    File URL: http://www.sciencedirect.com/science/article/B6W4F-4X97CYN-2/2/4acd649e2740faec4f4f0a2d6adef7dd
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    Article provided by Elsevier in its journal Global Finance Journal.

    Volume (Year): 20 (2009)
    Issue (Month): 3 ()
    Pages: 235-247

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    Handle: RePEc:eee:glofin:v:20:y:2009:i:3:p:235-247
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620162

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