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An empirical investigation of cross-border acquisitions between Canada and the United Kingdom

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An empirical investigation of cross-border acquisitions between Canada and the United Kingdom

Liu, Fang (2007) An empirical investigation of cross-border acquisitions between Canada and the United Kingdom. Masters thesis, Concordia University.

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Abstract

This study provides empirical evidence that during the period 1985-2005 cross-border bidders from both Canada and the United Kingdom earned higher announcement returns than domestic bidders. This cross-border excess return persists after controlling for industry effects, toeholds, payment methods and the effect of macro-economic conditions in the target country. Toeholds can explain the excess return for both cross-border and domestic bidders while it isn't associated with higher cross-border bidder gains. The horizontal factor weakly explains the cross-border excess returns. The cash method of payment cannot explain the observed excess gains for cross-border bidders over domestic bidders even though cross-border bidders generate higher gains than domestic bidder when both use cash. Better economic conditions in the target country are associated with higher returns of cross-border bidders. Further, the multinomial model indicates that British firms in the material industry are more likely to acquire foreign rather than domestic targets. Large Canadian firms prefer cross-border acquisitions. If the bidder or their industry have previous merger and acquisition experience in the U.S. market, the acquirer is more likely to acquire a U.S. firm than a domestic or other foreign firm.

Divisions:Concordia University > John Molson School of Business
Item Type:Thesis (Masters)
Authors:Liu, Fang
Pagination:vi, 49 leaves : ill. ; 29 cm.
Institution:Concordia University
Degree Name:M. Sc. Admin.
Program:John Molson School of Business
Date:2007
Thesis Supervisor(s):Betton, Sandra
ID Code:975555
Deposited By: Concordia University Library
Deposited On:22 Jan 2013 16:10
Last Modified:18 Jan 2018 17:40
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