Investor protection and value creation in cross-border M&As by emerging economies

2017 ◽  
Vol 29 (1) ◽  
pp. 83-100 ◽  
Author(s):  
Alberto Dell'Acqua ◽  
Leonardo Etro ◽  
Michele Piva ◽  
Emanuele Teti
Keyword(s):  
Emerging Economies ◽  
Value Creation ◽  
Investor Protection ◽  
Cross Border

Determinants of stock market reaction to cross-border acquisitions: evidence from emerging economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Samta Jain ◽  
Smita Kashiramka ◽  
P. K. Jain
Keyword(s):  
Emerging Economies ◽  
Value Creation ◽  
Global Economy ◽  
Emerging Market ◽  
Research Work ◽  
Abnormal Returns ◽  
Content Type ◽  
Cross Border ◽  
Country Level ◽  
Acquiring Firms

PurposeThe global economy has witnessed an exponential increase in cross-border acquisitions (CBAs) by emerging market companies (EMCs), demanding a relook at their internationalization strategy. The purpose of the study is to investigate whether the announcement of CBAs by EMCs creates value for the equity-holders of acquiring firms and identify factors affecting the valuation of acquiring companies.Design/methodology/approachThe paper investigates the announcement impact of CBAs of CNX Nifty 500 Indian and SSE 380 Chinese companies. The event study analysis of 553 Indian and 125 Chinese acquisitions supports the contention that CBAs are indeed a strategic choice of EMCs for value creation.FindingsCBAs generate positive and statistically significant abnormal returns for shareholders of both Indian and Chinese acquirers. The markets, however, differ in terms of their motivations; country-level factors have been observed to exert significant influence on the returns of Indian acquirers. Indian companies experience larger value creation on acquiring firms established in developed, institutionally closer and/or economically distant markets. The findings support the asset-seeking motive of Indian companies.Originality/valueThe research work contributes to the evolving stream of CBAs literature with a focus on the globalization strategies of EMCs. The present study is a modest attempt to lay the foundation for a new theoretical framework (asset-seeking perspective) of overseas acquisitions from emerging economies. The existing studies on emerging economies have emphasized, in isolation, either Indian CBAs or international acquisitions by Chinese firms. Being so, the study is unique and original in the sense that it is a comparative study of India and China.

The performance of cross-border acquirers from emerging economies

2016 ◽  
Vol 7 (1) ◽  
pp. 21-38 ◽  
Author(s):  
Xiaobai Ma ◽  
Yiying Zhu ◽  
Wenyuan Cai
Keyword(s):  
Emerging Economies ◽  
Ownership Structure ◽  
Value Creation ◽  
Multinational Enterprises ◽  
Design Methodology ◽  
Business Community ◽  
Short Term ◽  
Content Type ◽  
Cross Border ◽  
Traditional Understanding

Purpose – This paper aims to evaluate the value creation of cross-border acquisitions conducted by Chinese firms and determinants that result in the different performance. During the recent decades, the world has witnessed multinational enterprises (MNEs) from emerging economies undertaking aggressive cross-border mergers and acquisitions (M & As). This phenomenon raises great attention in the international business community, and also challenges the traditional understanding in the extant literature. Design/methodology/approach – The authors examine 272 cross-border M & As associated with 48 target countries during the period 1996-2012. Findings – Evidences show that cross-border expansions on average point to negative performance in the short term. The authors also find that prior cross-border M & A experiences, ownership structure of the acquirer (state-owned vs private) and acquirer size positively affect the performance of the acquiring firm. Originality/value – In addition to contributing to cross-border M & A literature, the findings also provide useful guidance to outward foreign direct investment by firms from emerging economies.

Do cross-border mergers-acquisitions in mature and emerging markets create similar value?

2018 ◽  
Vol 31 (4) ◽  
pp. 944-958 ◽  
Author(s):  
Ludivine Chalencon ◽  
Ulrike Mayrhofer
Keyword(s):  
Empirical Study ◽  
Emerging Markets ◽  
Financial Markets ◽  
Emerging Economies ◽  
Value Creation ◽  
Content Type ◽  
Cross Border ◽  
A Value ◽  
Before And After ◽  
Depth Classification

Purpose The purpose of this paper is to compare the value creation of cross-border mergers and acquisitions (M&As) in mature and emerging markets. Design/methodology/approach The empirical study is based on a sample of 285 cross-border M&As announced between 2010 and 2012 and completed by companies of the French SBF 120 index in 54 countries. Findings The statistical analysis shows how financial markets react before and after the announcement of M&As. The obtained findings highlight significant differences: the reaction of financial markets before the announcement is moderately positive for M&As in mature economies, but negative for those in emerging economies; their reaction after the announcement is clearly positive for M&As in mature markets and moderately positive for those in emerging markets. Research limitations/implications Future studies on M&A value creation should differentiate mature and emerging economies and adopt a more in-depth classification of target countries. Practical implications This research emphasizes the necessity to consider country-specific factors for M&A value creation. Originality/value The empirical study is based on a sample of French acquirers, who account for 3 percent of the volume and value of M&As in the world and whose operations are rarely studied in the literature. The authors compare the reaction of financial markets before and after the announcement of M&As conducted in mature and emerging economies.

scholarly journals What Drives Stops in Cross-Border Bond Flows?

2019 ◽  
Vol 11 (14) ◽  
pp. 3763
Author(s):  
Seung-Gwan Baek ◽  
Chi-Young Song
Keyword(s):  
Exchange Rate ◽  
Financial Markets ◽  
Emerging Economies ◽  
Exchange Rate Regimes ◽  
Real Exchange Rates ◽  
Flexible Exchange Rate ◽  
Regression Method ◽  
Policy Implications ◽  
Capital Account ◽  
Cross Border

This paper empirically explores the determinants of stop episodes driven by bond flows using quarterly data from 38 economies over the period 1995–2011. Drastic bond-led stop episodes may greatly destabilize domestic financial markets and lead to financial crisis, threatening the sustainability of the financial system. Using the complementary log–log regression method, we found that bond-led stop episodes were associated with contagion and domestic factors rather than global factors. The results of our estimation showed that the probability of bond-led stop episodes was higher in countries with larger financial markets or with more overvalued real exchange rates. The main policy implications of our results, particularly for emerging economies, are that bond-led stop episodes were less likely to occur in countries with higher levels of institutional quality, lower capital account restrictions, or more flexible exchange-rate regimes. Finally, we found that capital control played a relatively greater role in predicting bond-led stops in emerging economies than did exchange-rate regimes.

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