The Impact of Country Diversification on Wealth Effects in Cross-Border Mergers.
We posit that country diversification via cross-border mergers creates wealth by providing benefits for firms that are not available to their shareholders. We hypothesize that these benefits are inversely related to the extent of co-movement in the economies of the bidder's and target's countries. We examine the wealth effects of U.S. targets and bidders involved in cross-border mergers with firms in other countries during 1982-91. We show that wealth effects vary, depending on country affiliations of two merging firms, and are inversely related to the degree of economic co-movement between the two countries. Copyright 2000 by MIT Press.
Year of publication: |
2000
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Authors: | Kiymaz, Halil ; Mukherjee, Tarun K |
Published in: |
The Financial Review. - Eastern Finance Association - EFA. - Vol. 35.2000, 2, p. 37-58
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Publisher: |
Eastern Finance Association - EFA |
Saved in:
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