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Effects of Cross-border Merger and Acquisition on the Operational Risk of US and Canadian Companies

Author

Listed:
  • Bruno Lopes de Paula
  • Daiana Paula Pimenta
  • Ricardo Limongi França Coelho
  • Jaluza Maria Lima Silva Borsatto
  • Rafael Manoel de Oliveira

Abstract

The integration of the world economies is responsible for an increase in the number of cross-border mergers and acquisitions (M&A), together with the growing participation of companies from emerging countries in this type of investment. However, the area studies focus their analyses on the determinants, antecedents and profitability of the companies, leaving the effects of this type of business on the operational risk of the companies involved as a gap to be explored. To fill it, we used panel data regressions to identify the relationship between cross-border M&A and the operational risk of companies. The results indicate that acquiring companies based in emerging economies are the ones that suffer the most significant impacts on this type of business. As the implication, this study serves as a basis for the decision-making of the managers of the acquiring companies, being able to identify the risks of this activity and the ways of preventing them.

Suggested Citation

  • Bruno Lopes de Paula & Daiana Paula Pimenta & Ricardo Limongi França Coelho & Jaluza Maria Lima Silva Borsatto & Rafael Manoel de Oliveira, 2022. "Effects of Cross-border Merger and Acquisition on the Operational Risk of US and Canadian Companies," Global Business Review, International Management Institute, vol. 23(5), pages 1175-1187, October.
    • Handle: RePEc:sae:globus:v:23:y:2022:i:5:p:1175-1187
    DOI: 10.1177/0972150919895092
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