Trade Networks and Cross-Border Acquisitions

Evidence from United States Acquiring Firms

Seung Hun Han, Eun Jin Jo, Dong-Kyoon Kim, Duk Hee Lee

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)

Abstract

This study examines the impact of the trade networks of target firms' nation on the announcement returns of the cross-border acquisitions of United States acquirers. By using a sample of 818 cross-border acquisitions during 2000–2007, we find that the centrality measure of trade networks has a positive impact on announcement returns, after controlling for Hofstede's cultural distance measure between the acquiring and target nations and various firm- and deal-specific factors. In sum, trade network analysis, based on strength centrality, better explains the performance of acquiring firms than does the bilateral trade openness measurement used in previous studies.

Original languageEnglish
Pages (from-to)916-943
Number of pages28
JournalAsia-Pacific Journal of Financial Studies
Volume45
Issue number6
DOIs
StatePublished - 1 Dec 2016

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Cross-border acquisitions
Announcement returns
Centrality
Trade openness
Bilateral trade
Cultural distance
Specific factors
Network analysis
Distance measure
Hofstede

Keywords

  • Centrality
  • Cross-border mergers and acquisitions
  • Cultural distance
  • Network analysis
  • World trade network

Cite this

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Trade Networks and Cross-Border Acquisitions : Evidence from United States Acquiring Firms. / Han, Seung Hun; Jo, Eun Jin; Kim, Dong-Kyoon; Lee, Duk Hee.

In: Asia-Pacific Journal of Financial Studies, Vol. 45, No. 6, 01.12.2016, p. 916-943.

Research output: Contribution to journalArticleResearchpeer-review

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