This paper evaluates how the relation between firms’ cash holdings and their acquisition decisions changes over macroeconomic cycles using a sample of 47,615 acquisitions from 36 countries between 1997 and 2014. Higher cash holdings and stronger macroeconomic conditions each increase the likelihood that a firm will make an acquisition. However, larger cash holdings decrease the sensitivity of acquisitions to macroeconomic factors, suggesting that cash holdings lower financing constraints during times when the cost of external finance is high. Announcement day abnormal returns for acquirers follow a consistent pattern: They decrease with acquirer cash holdings and with better macroeconomic conditions.

We study privatization and corporate ownership in transportation infrastructure, focusing on global airports. Privatization in general does not improve performance. However, private equity (PE) ownership has strong and persistent positive effects on efficiency, volume, and quality, with positive externalities for the local economy. We address selection using close auctions where PE and non-PE firms bid. PE funds expand physical capacity and encourage larger planes while adding low-cost carriers and international routes. They are especially effective in countries with more corruption or state-owned flag carriers. In contrast, the poorer performance of non-PE acquirers may reflect private benefits and historical state ties.