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 language | English |
|---|---|
| Pages (from-to) | 916-943 |
| Number of pages | 28 |
| Journal | Asia-Pacific Journal of Financial Studies |
| Volume | 45 |
| Issue number | 6 |
| DOIs | |
| State | Published - 1 Dec 2016 |
Keywords
- Centrality
- Cross-border mergers and acquisitions
- Cultural distance
- Network analysis
- World trade network