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Financial transparency and cross-border mergers and acquisitions in the extractives industries

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  • Özgür Speitmann, Şevkat
  • Speitmann, Raffael
  • Wu, Yuchen

Abstract

This study examines the impact of financial transparency regulation on cross-border mergers and acquisitions (M&A) of affected firms. We study the Extraction Payments Disclosure (EPD) rule that requires European and Canadian resource extraction firms to publicly disclose payments made to host governments in order to promote accountability and transparency. Using a global sample of cross border acquisitions between 2010 and 2019, we find that the EPD rule has a negative effect on the likelihood of outbound foreign acquisitions of affected firms. Specifically, these firms experience a 4.3 percentage point reduction in the likelihood of participating in cross-border acquisitions, relative to non-affected control firms. Further analyses show that the negative effect is more pronounced for larger and more visible firms, as well as firms with previous acquisitions in countries with high corruption and tax havens. Collectively, the results suggest that the EPD rule imposes significant reputational costs on affected firms.

Suggested Citation

  • Özgür Speitmann, Şevkat & Speitmann, Raffael & Wu, Yuchen, 2025. "Financial transparency and cross-border mergers and acquisitions in the extractives industries," Resources Policy, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:jrpoli:v:109:y:2025:i:c:s0301420725002417
    DOI: 10.1016/j.resourpol.2025.105699
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