Review of Financial Studies Vol. 21 No. 2 2008
The Value of Investor Protection: Firm Evidence from Cross-Border Mergers
Abstract
[International law prescribes that in a cross-border acquisition of 100% of the target shares, the target firm becomes a national of the country of the acquiror, and consequently subject to its corporate governance system. Therefore, cross-border mergers provide a natural experiment to analyze the effects of changes in corporate governance on firm value. We construct measures of the change in investor protection in a sample of 506 acquisitions from 39 countries. We find that the better the shareholder protection and accounting standards in the acquiror's country, the higher the merger premium in cross-border mergers relative to matching domestic acquisitions.]
- Volume
- 21
- Issue
- 2
- Pages
- 605-648
- Sources
- bibtex:phds-export.bib