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The Medium of Exchange in Mergers and Acquisitions: The Cases of Travel Agencies and Tour Operators

Author

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  • Alfredo Coelho

    (Department Enterprises and Territories, Bordeaux Sciences Agro, 33170 Gradignan, France)

  • Victor Manuel Castillo-Girón

    (CUValles, University of Guadalajara, 45 100 Zapopan, Mexico)

Abstract

The choice of the means of exchange is one of the critical decisions in mergers and acquisitions. Travel agencies and tour operating-industries compete in a volatile environment, and in addition to generating economies of scale, investments in the industry involve important sunk costs. This paper’s focus is on the determinants of the medium of exchange in mergers and acquisitions in the travel and tour-operating industries. Previous research on the ‘law and finance’ perspectives argues that some country of origin legal systems offer better investment protection to investors. Accordingly, civil law-based systems offer weaker protection to investors when compared to common-law-based systems. For this purpose, we use a logistics regression to model the determinants of cash in a sample of 750 mergers and acquisitions by combining the research streams above. Our results provide evidence of the relationship between investor protection and the use of cash.

Suggested Citation

  • Alfredo Coelho & Victor Manuel Castillo-Girón, 2020. "The Medium of Exchange in Mergers and Acquisitions: The Cases of Travel Agencies and Tour Operators," Administrative Sciences, MDPI, vol. 10(4), pages 1-13, November.
    • Handle: RePEc:gam:jadmsc:v:10:y:2020:i:4:p:97-:d:451975
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    References listed on IDEAS

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