Corporate multinationality and acquirer returns

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Corporate multinationality and acquirer returns. / Agyei-Boapeah, Henry; Fosu, Samuel; Ntim, Collins.

In: Abacus, Vol. 56, No. 2, 29.06.2020, p. 230-267.

Research output: Contribution to journalArticlepeer-review

Harvard

Agyei-Boapeah, H, Fosu, S & Ntim, C 2020, 'Corporate multinationality and acquirer returns', Abacus, vol. 56, no. 2, pp. 230-267. https://doi.org/10.1111/abac.12146

APA

Agyei-Boapeah, H., Fosu, S., & Ntim, C. (2020). Corporate multinationality and acquirer returns. Abacus, 56(2), 230-267. https://doi.org/10.1111/abac.12146

Vancouver

Agyei-Boapeah H, Fosu S, Ntim C. Corporate multinationality and acquirer returns. Abacus. 2020 Jun 29;56(2):230-267. https://doi.org/10.1111/abac.12146

Author

Agyei-Boapeah, Henry ; Fosu, Samuel ; Ntim, Collins. / Corporate multinationality and acquirer returns. In: Abacus. 2020 ; Vol. 56, No. 2. pp. 230-267.

Bibtex - Download

@article{d22afa87b4934e6292ae711e17897f3b,
title = "Corporate multinationality and acquirer returns",
abstract = "This paper provides evidence on how corporate multinationality from the perspective of acquiring firms relates to M&A returns. Using multivariate regressions and a large dataset of over 6,000 M&As (both cross-border and domestic) by UK firms during 1987 to 2014, the paper finds multinationality to be associated with significantly higher short-run announcement returns and long-run operating performance. While the multinationality premium (higher M&A returns for multinationals) persists over time, it seems to be restricted to firms with superior resource/managerial capabilities and minimal agency problems. Finally, the multinationality premium appears to be driven by foreign acquisitions into advanced economies. The results are robust to correcting for sample selection bias and controlling for several firm and deal characteristics, as well as accounting for firm-, industry-, and year-fixed effects. Collectively, the findings imply that multinationality could be a source of value creation for acquiring firms, particularly in foreign acquisitions, which tend to be complex, and thereby, require superior managerial capabilities to succeed. ",
keywords = "Corporate multinationality, Firm capabilities, Geographic diversification, M&As, Multinational corporations, UK",
author = "Henry Agyei-Boapeah and Samuel Fosu and Collins Ntim",
note = "{\textcopyright} 2019 Accounting Foundation, The University of Sydney. This is an author-produced version of the published paper. Uploaded in accordance with the publisher{\textquoteright}s self-archiving policy. Further copying may not be permitted; contact the publisher for details.",
year = "2020",
month = jun,
day = "29",
doi = "10.1111/abac.12146",
language = "English",
volume = "56",
pages = "230--267",
journal = "Abacus",
issn = "1467-6281",
number = "2",

}

RIS (suitable for import to EndNote) - Download

TY - JOUR

T1 - Corporate multinationality and acquirer returns

AU - Agyei-Boapeah, Henry

AU - Fosu, Samuel

AU - Ntim, Collins

N1 - © 2019 Accounting Foundation, The University of Sydney. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details.

PY - 2020/6/29

Y1 - 2020/6/29

N2 - This paper provides evidence on how corporate multinationality from the perspective of acquiring firms relates to M&A returns. Using multivariate regressions and a large dataset of over 6,000 M&As (both cross-border and domestic) by UK firms during 1987 to 2014, the paper finds multinationality to be associated with significantly higher short-run announcement returns and long-run operating performance. While the multinationality premium (higher M&A returns for multinationals) persists over time, it seems to be restricted to firms with superior resource/managerial capabilities and minimal agency problems. Finally, the multinationality premium appears to be driven by foreign acquisitions into advanced economies. The results are robust to correcting for sample selection bias and controlling for several firm and deal characteristics, as well as accounting for firm-, industry-, and year-fixed effects. Collectively, the findings imply that multinationality could be a source of value creation for acquiring firms, particularly in foreign acquisitions, which tend to be complex, and thereby, require superior managerial capabilities to succeed.

AB - This paper provides evidence on how corporate multinationality from the perspective of acquiring firms relates to M&A returns. Using multivariate regressions and a large dataset of over 6,000 M&As (both cross-border and domestic) by UK firms during 1987 to 2014, the paper finds multinationality to be associated with significantly higher short-run announcement returns and long-run operating performance. While the multinationality premium (higher M&A returns for multinationals) persists over time, it seems to be restricted to firms with superior resource/managerial capabilities and minimal agency problems. Finally, the multinationality premium appears to be driven by foreign acquisitions into advanced economies. The results are robust to correcting for sample selection bias and controlling for several firm and deal characteristics, as well as accounting for firm-, industry-, and year-fixed effects. Collectively, the findings imply that multinationality could be a source of value creation for acquiring firms, particularly in foreign acquisitions, which tend to be complex, and thereby, require superior managerial capabilities to succeed.

KW - Corporate multinationality

KW - Firm capabilities

KW - Geographic diversification

KW - M&As

KW - Multinational corporations

KW - UK

UR - http://www.scopus.com/inward/record.url?scp=85059665343&partnerID=8YFLogxK

U2 - 10.1111/abac.12146

DO - 10.1111/abac.12146

M3 - Article

VL - 56

SP - 230

EP - 267

JO - Abacus

JF - Abacus

SN - 1467-6281

IS - 2

ER -