scholarly journals Cross-border acquisitions by emerging countries multinationals : short-term abnormal returns

2021 ◽  
Author(s):  
Ali Farhan Chaudhry
Keyword(s):  
Research Work ◽  
Abnormal Returns ◽  
Political Stability ◽  
Developed Countries ◽  
Legal Framework ◽  
Emerging Countries ◽  
Short Term ◽  
Cross Border ◽  
The Impact ◽  
Developing And Developed Countries

The current study investigates short-term abnormal returns of emerging countries multinationals acquirers on cross-border acquisitions in other emerging and developed countries. For this objective, the current study employs market return model approach and then uses the event study to estimate short-term abnormal returns of the emerging countries acquirers and used daily data for the period of January 01, 2010 to March 31, 2018. Statistical results lead to conclude that shareholders of the emerging countries acquirers earn short-term positive and statistically significant abnormal returns on cross-border acquisitions in other emerging countries. Similarly, results conclude that shareholders of the acquiring firms of the emerging countries earn short-term positive and statistically significant returns on cross-border acquisitions in developed countries. These return patterns of the emerging countries multinational companies (EMNCs) on cross-border acquisitions in developing and developed countries are not like abnormal short-term abnormal return patterns of the developed countries multinational companies (MNCs) on cross-border acquisitions. The current study also concludes that factors such as political stability has inverse, legal framework inverse though insignificant, size of emerging countries acquirers direct, leverage negative, and ownership no impact on short-term abnormal returns of EMNCs proxied by CAR (-1, 1) on cross-border acquisitions in other emerging countries. Moreover, concludes that factors such as political stability, legal framework, and size of emerging countries acquirers have inverse, leverage direct, ownership has no effect on short-term abnormal returns of EMNCs proxied by CAR (-1, 1) on cross-border acquisitions in developed countries. The implications of the current study are of great importance both for the acquirers and investors of the emerging countries. Therefore, investors can insight short-term abnormal return patterns on the announcement of cross-border acquisitions by the EMNCs in other emerging and developed countries. Further, implications of the current study can help to anticipate response of the market participants on the news of cross-border acquisitions by the EMNCs in developing and developed countries. Henceforth, keeping in view the short- term positive abnormal pattern of the acquirers of the emerging countries multinationals on cross-border acquisitions, smart investment decisions can be made to achieve synergies, efficiencies, access on skilled labor, access on low cost capital, higher sales, and access on technology that will ultimately increase the wealth of the shareholders. Limitations of the current study are to cross-border acquisitions of the emerging countries multinationals in developing and developed countries, but more research work can be undertaken to investigate the impact of industry-wise cross-border acquisitions. Also, current study is limited to examine the cross-border acquisitions of the emerging countries multinationals of the public companies in other developing and developed countries, however more empirical research can be undertaken to examine the effects of cross-border acquisitions in private sectors. More empirical research can be undertaken by adding the impact of cross-border mergers by the emerging countries multinationals on short-term abnormal returns in developing and developed countries. Similarly, research work can be undertaken to examine the long run impact of the cross-border mergers and acquisitions by the emerging countries multinationals on the efficiencies and profitability.

scholarly journals Cross-border acquisitions by emerging countries multinationals : short-term abnormal returns

2021 ◽  
Author(s):  
Ali Farhan Chaudhry
Keyword(s):  
Research Work ◽  
Abnormal Returns ◽  
Political Stability ◽  
Developed Countries ◽  
Legal Framework ◽  
Emerging Countries ◽  
Short Term ◽  
Cross Border ◽  
The Impact ◽  
Developing And Developed Countries

The current study investigates short-term abnormal returns of emerging countries multinationals acquirers on cross-border acquisitions in other emerging and developed countries. For this objective, the current study employs market return model approach and then uses the event study to estimate short-term abnormal returns of the emerging countries acquirers and used daily data for the period of January 01, 2010 to March 31, 2018. Statistical results lead to conclude that shareholders of the emerging countries acquirers earn short-term positive and statistically significant abnormal returns on cross-border acquisitions in other emerging countries. Similarly, results conclude that shareholders of the acquiring firms of the emerging countries earn short-term positive and statistically significant returns on cross-border acquisitions in developed countries. These return patterns of the emerging countries multinational companies (EMNCs) on cross-border acquisitions in developing and developed countries are not like abnormal short-term abnormal return patterns of the developed countries multinational companies (MNCs) on cross-border acquisitions. The current study also concludes that factors such as political stability has inverse, legal framework inverse though insignificant, size of emerging countries acquirers direct, leverage negative, and ownership no impact on short-term abnormal returns of EMNCs proxied by CAR (-1, 1) on cross-border acquisitions in other emerging countries. Moreover, concludes that factors such as political stability, legal framework, and size of emerging countries acquirers have inverse, leverage direct, ownership has no effect on short-term abnormal returns of EMNCs proxied by CAR (-1, 1) on cross-border acquisitions in developed countries. The implications of the current study are of great importance both for the acquirers and investors of the emerging countries. Therefore, investors can insight short-term abnormal return patterns on the announcement of cross-border acquisitions by the EMNCs in other emerging and developed countries. Further, implications of the current study can help to anticipate response of the market participants on the news of cross-border acquisitions by the EMNCs in developing and developed countries. Henceforth, keeping in view the short- term positive abnormal pattern of the acquirers of the emerging countries multinationals on cross-border acquisitions, smart investment decisions can be made to achieve synergies, efficiencies, access on skilled labor, access on low cost capital, higher sales, and access on technology that will ultimately increase the wealth of the shareholders. Limitations of the current study are to cross-border acquisitions of the emerging countries multinationals in developing and developed countries, but more research work can be undertaken to investigate the impact of industry-wise cross-border acquisitions. Also, current study is limited to examine the cross-border acquisitions of the emerging countries multinationals of the public companies in other developing and developed countries, however more empirical research can be undertaken to examine the effects of cross-border acquisitions in private sectors. More empirical research can be undertaken by adding the impact of cross-border mergers by the emerging countries multinationals on short-term abnormal returns in developing and developed countries. Similarly, research work can be undertaken to examine the long run impact of the cross-border mergers and acquisitions by the emerging countries multinationals on the efficiencies and profitability.

Does the origin matter? The effects of cross-border mergers and acquisitions in France

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Federico Carril-Caccia
Keyword(s):  
Foreign Direct Investment ◽  
Mergers And Acquisitions ◽  
Direct Investment ◽  
Developed Countries ◽  
Emerging Countries ◽  
Intangible Asset ◽  
Data Set ◽  
Content Type ◽  
Cross Border ◽  
The Impact

PurposeThe present article analyses the effects of cross-border mergers and acquisitions (CBM&As) on targets' total factor productivity (TFP), employment, wages and intangible-asset investment. The author investigates whether the impact of CBM&As differs depending on the origin of the investing multinational (MNE). The author distinguishes between CBM&As from European countries, other developed countries and emerging countries.Design/methodology/approachThe author makes use of a unique firm-level data set of foreign direct investment in the French manufacturing sector. The authors applies propensity score matching and difference in differences to estimate the effect of CBM&As.FindingsThe results show that the consequences of CBM&As differ strongly depending on the origin. CBM&As from European MNEs have a positive impact on TFP, wages and intangible-asset investment, and those from emerging countries seem to increase wages and intangible-asset investments. In contrast, CBM&As that originate from MNEs from other developed countries do not have a significant effect.Originality/valueThis article contributes to the growing literature on the effects of foreign direct investment that highlights the relevance of accounting for the MNEs' origin. In particular, it is the first to address the impact of emerging-country MNEs' CBM&As in Europe.

Transferring Knowledge through Cross-Border Communities of Practice

2016 ◽  
pp. 1-30 ◽  
Author(s):  
Rossella Canestrino ◽  
Pierpaolo Magliocca
Keyword(s):  
Knowledge Transfer ◽  
Communities Of Practice ◽  
Developed Countries ◽  
Emerging Countries ◽  
Economic Environment ◽  
International Level ◽  
Multicultural Teams ◽  
Cross Border ◽  
Border Communities ◽  
The Impact

The aim of this chapter is to explore the use of Cross –Border Communities of Practice (CCoP) as way for managing knowledge in a global socio-economic environment, mainly referring to the rising economies. In doing so, some important issues related to cross-border knowledge transfer have been investigated, taking into account the impact that cultural diversities have on individuals' propensity to cooperate, as well as on their attitude to transfer and to share knowledge. The Authors explain the role that Global Managers have as “cultural bridges” in multicultural teams, thus enabling the last ones' transformation into a CCoP. With reference to both the opportunities and challenges that characterize the rising economies, CCoP arises as the best suitable way to transfer knowledge at international level, when firms from developed countries encounter firms from emerging countries.

scholarly journals The Impact of Single and Multiple Mergers and Acquisitions on Shareholders’ Wealth of UK Bidder Firms

2017 ◽  
Vol 9 (3) ◽  
pp. 141
Author(s):  
George Giannopoulos ◽  
Ehsan Khansalar ◽  
Patel Neel
Keyword(s):  
Mergers And Acquisitions ◽  
Target Location ◽  
Abnormal Returns ◽  
Payment Method ◽  
Short Term ◽  
Cross Border ◽  
Learning Hypothesis ◽  
The Impact ◽  
First Time ◽  
Industry Relatedness

This study investigates the impact of takeover announcements on UK acquirer shareholders’ wealth during the period 2002-2006. More specifically, it is investigated whether the impact of single acquirers on shareholders’ wealth is significantly different from the impact of multiple acquirers. Findings suggest that acquirer shareholders experience positive abnormal returns during the announcement period. Moreover, the results indicate single acquirers consistently outperform multiple acquirers when testing for deal characteristics such as: payment method (cash or equity), target status (public or private), target location (domestic or cross-border) and industry relatedness (specification or diversification). Performance declines with sequential acquisitions due to merger programme announcement hypothesis. Successful first time acquirers suffer from hubris whilst unsuccessful first time acquirers learn from their experiences suggested by the organisation learning hypothesis but go on to suffer from hubris. Acquisitions of private firms yield significant abnormal returns whereas public acquisitions reduce the value of UK acquirers. The effect of cash and equity, domestic and foreign, related and unrelated takeovers are inconclusive for the short-term windows investigated by this study.

Thematic Priorities For Sustainable Development of Ukraine-Romania Cross-Border Cooperation (The Case Study of Chernivtsi Region)

2020 ◽  
pp. 205-219
Author(s):  
Valentyna Bohatyrets ◽  
Liubov Melnychuk ◽  
Yaroslav Zoriy
Keyword(s):  
Foreign Policy ◽  
Quantitative Research ◽  
Legal Framework ◽  
Cultural Development ◽  
Cross Border ◽  
Strategic Orientations ◽  
The Impact ◽  
Further Development ◽  
Cross Border Cooperation ◽  
The Eu

This paper seeks to investigate sustainable cross-border cooperation (CBC) as a distinctive model of interstate collaboration, embedded in the neighboring borderland regions of two or more countries. The focus of the research revolves around the establishment and further development of geostrategic, economic, cultural and scientific capacity of the Ukrainian-Romanian partnership as a fundamental construct in ensuring and strengthening the stability, security and cooperation in Europe. This research highlights Ukraine’s aspirations to establish, develop and diversify bilateral good-neighborly relations with Romania both regionally and internationally. The main objective is to elucidate Ukraine-Romania cross-border cooperation initiatives, inasmuch Ukraine-Romania CBC has been stirring up considerable interest in terms of its inexhaustible historical, cultural and spiritual ties. Furthermore, the similarity of the neighboring states’ strategic orientations grounds the basis for development and enhancement of Ukraine-Romania cooperation. The authors used desk research and quantitative research to conclude that Ukraine-Romania CBC has the impact not only on the EU and on Ukraine multi-vector foreign policy, but it also has the longer-term global consequences. In the light of the current reality, the idea of introducing and reinforcing the importance of Cross-Border Cooperation (CBC) sounds quite topical and relevant. This research considers a number of explanations for Ukraine-Romania Cross-Border Cooperation as a key element of the EU policy towards its neighbors. Besides, the subject of the research is considered from different perspectives in order to show the diversity and complexity of the Ukraine-Romania relations in view of the fact that sharing common borders we are presumed to find common solutions. As the research has demonstrated, the Ukraine-Romania cross border cooperation is a pivotal factor of boosting geostrategic, economic, political and cultural development for each participant country, largely depending on the neighboring countries’ cohesion and convergence. Significantly, there is an even stronger emphasis on the fact that while sharing the same borders, the countries share common interests and aspirations for economic thriving, cultural exchange, diplomatic ties and security, guaranteed by a legal framework. The findings of this study have a number of important implications for further development and enhancement of Ukraine-Romania cooperation. Accordingly, the research shows how imperative are the benefits of Romania as a strategic partner for outlining top priorities of Ukraine’s foreign policy.

Stock Market Reaction on Green-Bond Issue: Evidence from Indian Green-Bond Issuers

2021 ◽  
pp. 097226292110225
Author(s):  
Rakesh Kumar Verma ◽  
Rohit Bansal
Keyword(s):  
Stock Returns ◽  
Financial Institutions ◽  
Stock Price ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Developed Countries ◽  
Low Carbon ◽  
Bond Issue ◽  
The Government ◽  
The Impact

Purpose: A green bond is a financial instrument issued by governments, financial institutions and corporations to fund green projects, such as those involving renewable energy, green buildings, low carbon transport, etc. This study analyses the effect of green-bond issue announcement on the issuer’s stock price movement. It shows the reaction of the stock price after the issue of green bonds. Methodology: This study is based on secondary data. Green-bond issue dates have been collected from newspaper articles from different online sources, such as Business Standard, The Economic Times, Moneycontrol, etc. The closing prices of stocks have been taken from the NSE (National Stock Exchange of India Limited) website. An event window of 21 days has been fixed for the study, including the 10 days before and after the issue date. Data analysis is carried out through the event study method using the R software. Calculation of abnormal returns is done using three models: mean-adjusted returns model, market-adjusted returns model and risk-adjusted returns model. Findings: The results show that the issue of green bonds has a significant positive effect on the stock price. Returns increase after the green-bond issue announcement. Although the announcement day shows a negative return for all the samples taken for the study, the 10-day cumulative abnormal return (CAR) is positive. Thus, green-bond issues lead to positive sentiments among investors. Research implications: This research article will help the government issue more green bonds so that the proceeds can be utilized for green projects. The government should motivate corporations and financial institutions to issue more green bonds to help the economy grow. In India, very few organizations have issued a green bond. It will be beneficial if these players issue green bonds, as it will increase the firms’ value and boost returns to the investors. Originality/value: The effect of green-bond issue on stock returns has been analysed in some studies in developed countries. This is the first study to examine the impact of green-bond issue on stock returns in the Indian context, to the best of our knowledge.

The New Regulator in Town: The Effect of Walmart's Sustainability Mandate on Supplier Shareholder Value

2018 ◽  
Vol 82 (2) ◽  
pp. 124-141 ◽  
Author(s):  
Katrijn Gielens ◽  
Inge Geyskens ◽  
Barbara Deleersnyder ◽  
Max Nohe
Keyword(s):  
Brand Equity ◽  
Shareholder Value ◽  
Abnormal Returns ◽  
Short Term ◽  
Power Sources ◽  
Expert Power ◽  
Operational Characteristics ◽  
Countervailing Power ◽  
Cost Efficient ◽  
The Impact

Suppliers are increasingly being forced by dominant retailers to clean up their supply chains. These retailers argue that their sustainability mandates may translate into profits for suppliers, but many suppliers are cynical about these mandates because the onus to undertake the required investments is on them while potential gains may be usurped by the mandating retailer. We examine whether supplier fears are justified by studying the impact of Walmart's sustainability mandate on its suppliers’ (short-term) shareholder value. Although about two-thirds of suppliers are indeed financially harmed, approximately one-third benefit. To delve deeper into this variation, we relate suppliers’ short-term abnormal returns to Walmart's appropriation power and explore whether and to what extent a supplier's referent and expert power sources, derived from its marketing and operational characteristics, respectively, can counteract Walmart's appropriation attempts. We find that the supplier's marketing characteristics (its environmental reputation, brand equity, and advertising) provide it with the countervailing power needed to resist Walmart's appropriation attempts. In contrast, cost-efficient suppliers and suppliers that invest heavily in R&D have more difficulty withstanding Walmart's squeeze attempts.

scholarly journals Effects of Institutional Quality on FDI in Provinces of Vietnam: Empirical Evidence Based on Differenced Panel GMM

2015 ◽  
Vol 22 (03) ◽  
pp. 26-45
Author(s):  
Bon Nguyen Van
Keyword(s):  
World Economy ◽  
Institutional Quality ◽  
Total Sample ◽  
Developed Countries ◽  
Evidence Based ◽  
Fdi Inflows ◽  
Positive Effects ◽  
The Past ◽  
The Impact ◽  
Developing And Developed Countries

Foreign direct investment (FDI) has been strongly affecting the world economy during the past years and is a critical topic for both developing and developed countries. Most countries, particularly developing ones, always attempt to adjust and modify appropriate policies and institutions to attract FDI inflows. In the context of Vietnam, does the institutional quality have any effect on attracting FDI inflows in provinces? To answer clearly and exactly this question, the impact of institutional quality on attracting FDI inflows is empirically investigated in a sample of 43 provinces of Vietnam over the period of 2005–2012 via the estimation technique of difference panel GMM. Estimated results indicate that in the total sample of all provinces the institutional quality has significantly positive effects on the FDI flows. However, in the sub-sample of provinces the impact of the institutional quality on attracting FDI inflows in Northern and Southern regions are statistically significant while that in Central region is not.

scholarly journals The Impact of Environmental Regulation on Location’s Choice of Cross-Border Mergers and Acquisitions

2020 ◽  
Author(s):  
Federico Carril-Caccia ◽  
Juliette Milgran Baleix
Keyword(s):  
Environmental Policy ◽  
Mergers And Acquisitions ◽  
Environmental Regulation ◽  
Gravity Model ◽  
Institutional Quality ◽  
Emerging Countries ◽  
Extensive Margin ◽  
Cross Border ◽  
High Level ◽  
The Impact

This study contributes to the literature seeking to test the pollution haven’s hypothesis (PHH), by focusing on the influence of environmental policy on the location’s decision of cross-border Mergers and Acquisitions (M&As). To this end, we estimate a gravity model using an original bilateral database for the extensive margin of M&A among 34 developed and emerging countries during the period 1995-2015. Reached evidence confirms only part of the pessimist predictions. A more stringent environmental regulation would not boost outward M&As to the extent that it originates from countries with relatively good institutional quality. In contrast, in countries with relatively high level of corruption, the laxer the environmental regulation, the higher the number of inward M&As. However, reducing corruption can compensate the competitiveness losses associated with the compliance of a stricter environmental regulation

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.

Sign in / Sign up

Export Citation Format

Share Document