This paper proposes a cross-border M&A model with financially constrained owners in which the identity of the buyer and seller can be determined. We show that policies blocking foreign acquisitions to protect the domestic industry can be counterproductive. Foreign acquisition can increase the...

How does the market for corporate control reallocate firm ownership in response to adverse aggregate financial shocks? To answer this question, we develop a tractable model of mergers and acquisitions (M&As) where firms facing different degrees of financial constraints acquire ownership of...

Anglo-American stock markets are much larger than their continental counterparts. Does investor protection and governance explain these differences? Using UK data, we examine four different forms of intervention which are suppose to promote good governance: takeovers, independent directors,...