We examine the motives for and consequences of 4759 cross-border acquisitions constituting $593 billion of total activity that were led by government-controlled acquirers over the period from 1990 to 2008. Government acquirers are more likely than corporate acquirers to come from autocratic countries with higher levels of foreign currency reserves and more active domestic acquisitions programs, and they are more likely to pursue targets in countries with larger natural resource sectors and more potential to diversify their own industrial structures. When we account for the potential endogeneity of bidder-target matching that arises from a government deal being correlated with such observable or other unobserved characteristics, we find government deals are associated with higher announcement returns for the target firms, a higher probability of engaging in a complete control (100%) transaction, and no higher likelihood of deal failure or withdrawal compared to corporate deals. Policy implications are discussed, especially in light of recent regulatory changes in the U.S. and other countries that seek to restrict foreign acquisitions by government-controlled entities.

Relative to other countries, the U.S. now has abnormally few listed firms. This “U.S. listing gap” is consistent with a decrease in the net benefit of a listing for U.S. firms. Since the listing peak in 1996, the propensity to be listed is lower for all firm size categories and industries, the new list rate is low, and the delist rate is high. The high delist rate accounts for 46% of the listing gap and the low new list rate for 54%. The high delist rate is explained by an unusually high rate of acquisitions of publicly listed firms.